Payroll deduction codes are the "master keys" to payroll that allow Employee Navigator to send new, updated, and ending deductions for all employees whenever changes occur to enrollments or costs.

 

Once your deduction codes have been mapped, please refer to our article Completing your Deduction Audit

1. Our 'How to' video!

2. Where do I find these codes?

3. How do I map these codes into Employee Navigator?

4. Can I edit these codes or transmission settings if I made a mistake?

5. What deduction types are not currently exchanged?

6. FAQ

 

Video Walkthrough

 

Where do I find these codes?

• If using Paylocity, Paychex, or any ADP platform:
  • • Go to your Payroll tab in EN once your integration request has been approved à Payroll Groups --> Click into a payroll group --> Click the Vendor Payroll Codes button at the top     --> Click Refresh Codes to pull in the codes from the payroll system.

• Once the codes have been pulled in from payroll, click the pencil icon next to the plan you wish to add a Deduction Code to.
  • By clicking on the appropriate code box, a dropdown will appear to select from.

• If using any other payroll partners:
  • Ask HR to pull their Deduction report for the integration. This report will have all of their currently in-use codes listed for you to view and map into their applicable benefit types.
    • Partner user guide with instructions to pull this report can be found here

 

How do I set up these deduction codes?

Your Payroll tab will initially show an 'Incomplete Codes' message, which is expected until you've mapped your codes into Employee Navigator

 

1) Click on the ‘View Codes’ link within your Payroll tab --> Deduction Codes section

There are three different types of code setups that you might have:

1. Plan Based
2. Coverage Level Based
3. Limit Level Based

3 different deduction transmission options:

1. Always Send
2. Never Send
3. Don't Send $0
   • Employee Navigator does not recommend using this option.

3 different employer contribution transmission options:

1. Always Send
2. Never Send
3. Don't Send $0
   • Employee Navigator does not recommend using this option.

 

Plan Based Codes

• This is the most common code configuration you will have in Payroll.
• You will likely have a single code, such as MED or MDCL, that represents the entire employee (and spouse or dependent(s)) consolidated cost.
  • This code can be mapped into the applicable pre or post-tax section of the plan.

Coverage Level Based

• This is another form of code configuration you might have in Payroll.
• You will likely have multiple deduction codes that each represent a coverage tier's cost, such as MEDEE, MEDSP, MEDCH, and MEDFAM for example.
  • These codes can be mapped into the plan's applicable pre- or post-tax section.

Note: We will only show the coverage level options for plans with Composite Rate types. We do not support coverage-level based codes for ACA-rated, Banded, or Individually-Banded rate types within your Costs --> Rates section of a plan.

 

Limit Level Based Codes

• This is another form of code configuration you might have in Payroll specific to your Health Savings Account plans
• You will likely have multiple deduction codes representing an Employee-only or Family-level HSA code. Limit Level Based codes are unique to Health Savings Accounts (HSA).
  • These codes can be mapped into the plan's applicable pre or post-tax section.

 

This functionality allows for the configuration of up to 4 deduction codes, depending on the client’s needs. If not all HSA Limits are being used by the company, our system will allow for the same deduction code to be used more than once, so you can just copy the codes from the Single and Family tiers into the Single Catch-up and Family Catch-up tiers.

NOTE on age-based code restrictions: If an employee is above age 55, EN will send codes from the Catch-up sections (Single catch-up or Family catch-up). If they are under 55, then EN will send the codes from the standard sections (Single for Family). If your catch-up code cannot be set to have an annual max of the IRS max + the IRS catch-up max, then please see below.

EN will not send two codes for HSA if an employee is over 55 (one for the regular limit and one for the catch up), and will only send the code mapped into the Catch-up sections.

 

OUR BEST PRACTICE: We strongly advise to just map the regular HSA code(s) into both the Single/Family and Single Catch-up/Family Catch-up sections, and manage the catch-up deductions manually in payroll.

This will ensure that if your payroll partner has maximum limits on your catch-up code, that employees aged 55 and above do not have their regular deferrals in payroll capped at $1,000.

 

Third Party App Benefits

With Third-Party Apps, the carrier is the system of record of the enrollment or policy record. That means that all effective dates, benefit amounts, and premiums are determined by the carrier and then passed to Employee Navigator to store on the employee record. (More information here). Because of this, there will be no need to select a coverage level type as it will be automatically configured based on being tied to a Third Party App benefit. For all Third Party App Benefits, both a Pre-tax and Post-tax deduction code will be required.

 

Transmission Options:

These transmission options apply to both deductions and earnings:

• Always Send
  • Always send the transmission, even with $0 amounts
• Never Send
  • Will never send the transmission
  • This could be used for 100% employer-sponsored benefits
  • Deduction codes will not be required but can be added for reporting usage
• Don't Send $0
  
  • We do not recommend using this option. When used, EN will be unable to zero out a deduction in payroll if an employee moves from a true per-pay cost above $0 down to $0
    • Most common with HSA plans or plans where the EE cost is covered at 100%.

 

Can I edit these codes if I made a mistake?

Yes! While you are in Audit mode for the setup process as well as when you are Live for the integration, these deduction codes and transmission settings can be updated by both broker and HR Users.

If you are in audit mode for the integration: You can edit a code, transmission setting, or plan vs. coverage level-based setting to correct them at anytime --> re-enter the Deduction Audit to continue reviewing discrepancies.

If you are Live for the integration: You can edit a code, transmission setting, or plan vs. coverage level-based setting to correct them at any time. To ensure we keep EN and Payroll in sync with one another, what our system will do here for you is:

1. Upon saving the change to the specific plan's code, we will show a modal
   1. We will not display this modal if a transmission setting is changed, say, from 'Never Send' to 'Always Send' at this time. For now, please reach out to Payroll@employeenavigator.com to push these for you if a code was already in place and just the transmission setting was adjusted. 
   2. 
2. Once you click 'Confirm', our system will run a job to instantly send all deductions associated with that plan to payroll to be sure the corrected code and applicable costs are inserted automatically for you.
   1. If you by chance replaced one valid code with another, then the original code and associated costs must be removed from Payroll. Employee Navigator will only be able to transmit the updated code(s) to payroll, we cannot end the original code(s) if it by chance was valid and had been previously exchanged over the integration's API.
   2. If you need assistance removing codes from payroll, please find your payroll partner's contact here: Click to find the Support email for your payroll partner

 

What deduction types are not currently exchanged?

In our article, Payroll: Integration Overview, we cover in more detail what we do not exchange on the integration. There are a few plan types we don't support at all, and there are some we support deductions only.

• Unsupported plan types:
  • Commuter Benefits
  • 401K
  • Universal Plans
• Partially supported plan types (deductions only, no earnings):
  • HSA
  • Group Life
  • Group AD&D

FAQ

Q: Why am I seeing a message on my Payroll tab of 'Invalid Codes'?

A: If your partner has the 'Vendor Payroll Codes' feature enabled that allows Employee Navigator to retrieve payroll codes from the partner's system, then we will know if a code that may have been mapped previously is invalid. This message's "Learn More" link will direct you to the specific Payroll Groups --> specific plan(s) with incorrect codes so you can update them.

 

 

Q: Can I edit my deduction (or earning) codes once I am Live for the integration?

A: Yes! Please see the above section

 

Q: Can I use the same code for more than one benefit type?

A: No, all benefit types must have unique deduction codes. For example, you cannot use the same 'Colonial Pre' code for an Accident and Critical Illness plan, both plans must have a unique code to allow us to start, change, or stop deductions independently from one another.

 

Q: Can I use the same deduction code for all Third Party Plans and both Group Life/ Vol. Life?

A: No. Each Third Party Plan requires a unique deduction code as these are separate benefit categories in EN. This is the same with Group Life and Voluntary Life. 

 

Q: The system requires a deduction code for Child coverage; however, the plan does not offer Child benefits. Do I need to create a new deduction code in payroll for this?

A: No! You may use a dummy deduction code of 'NA' for the Child coverage level of the plan. This will fulfill the requirement of having a deduction code in EN and will not send to payroll as benefits are not offered for the Child.

 

Q: Does it matter if a code is placed into Pre-tax or Post-tax column? 

A: Yes, but only in certain scenarios:

• If the client has just one code for all employees which is configured as pre-tax or post-tax in payroll, the placement does not matter. 
• If the client has two codes where some employees are pre-tax and others have deductions post-tax, then the placement does matter.
  • Each must be in its respective section of all applicable plans. Anyone who needs a post-tax code used must be classified as the correct 2% shareholder or Direct lineal descendant of a 2% shareholder in Employee Navigator, depending on which one they are.
• If the client has one code and the plan in Employee Navigator allows a user to define the tax status of the enrollment, then the placement does matter. 
  • If a Voluntary LTD or STD plan settings > Costs > Rates is set to only allow post-tax enrollments, the code must be in the post-tax section. The same goes for pre-tax. If both are allowed, there must be two codes mapped into their respective sections. 
• If the plan is a 3PA plan where the enrollment is returned to Employee Navigator from another system, the placement does matter. 
  • Both a Pre-tax and Post-tax code will be required to Save.

Q: I have employees who must receive post-tax deductions, how do I configure this? 

A:  If they are not 2% shareholders or Direct lineal descendants of a 2% shareholder: Create a new payroll group with the same frequency --> Add the post-tax deduction codes to this group and any other pre-tax deductions for plans that must be withheld pre-tax for all --> Adjust each applicable employee’s payroll group to the new one. 

If they are 2% shareholders or Direct lineal descendants of a 2% shareholder: Go to their Profile → Employment → Statutory Class → Choose ‘2% Shareholder’ and Save. This will allow EN to apply only the post-tax deduction codes you’ve mapped into your payroll group(s) for this employee. 

 

Q: Do I need to set up Employer Codes even if my payroll provider does not exchange them with Employee Navigator?

A: No, you do not. You can keep the "No" checkbox marked under Employer Codes. If you do wish to enter an employer earning code for reporting purposes, make sure to set the Earning Transmission Option to "Never Send".