Payroll: Managing Qualified Life Events

The purpose of this article is to outline what to expect when Qualified Life Events (QLEs) are processed within the Employee Navigator system while using our Integrated Payroll product.

We will cover the following:

1. Your two scenarios
2. Timing
3. Options for HR

Your two scenarios

When processing Life Events while using integrated payroll, we will send deductions to payroll depending upon the way your deduction codes are built: Plan-based or Coverage-Level based. For details regarding these code structures, please refer to our article Configuring your deduction codes

Plan-based

When a deduction code is plan-based there is just one code mapped into Employee Navigator.  All deduction values for the plan, regardless of the enrollment's coverage level, will be sent to Payroll along with the one code used to insert the cost.

Example: The code MDCL is used for all enrolled coverage tiers. The code will send to payroll along with the cost for an EE-only enrollment, EE+Spouse enrollment, or EE+Family enrollment.

When using Plan-based deduction codes, which is the most common format, the following will occur when a Life Event is processed in our system and your 'HR Approval' is set to 'No':

1. Employee or HR User processes a QLE to add, drop, or adjust coverage.
2. Employee Navigator will instantly send the new per pay cost, new effective date, and plan-based code to Payroll.
3. Payroll will overwrite the previously existing, matching deduction code with the new cost and new effective date.

Coverage-level based

When a deduction code is Coverage-level Based, a client will have mapped multiple codes into Employee Navigator.  Deduction values for a plan will be sent to payroll along with the deduction code that corresponds with the employee's coverage level to insert the cost.

Example:  There are unique codes for EE-only, EE+Spouse, EE+Children, and EE+Family coverage levels.

When using Coverage-level based deduction codes, which is the most common format, the following will occur when a Life Event is processed in our system and your 'HR Approval' is set to 'No':

1. Employee or HR User processes a QLE to add, drop, or adjust coverage.
2. Employee Navigator will instantly send:
   1. An ending deduction for the original deduction code/coverage level with an end date that equals one day prior to the start date of the new coverage.
   2. A new deduction with the new per pay cost, new effective date, and new coverage-level based code to Payroll.
3. Payroll will continue to take the original deduction until the final payroll is processed for its end date, and will begin taking the new deduction in the payroll following the start date of the new deduction.

Timing

As you can see, if a Life Event is processed for a plan-based deduction code too early, the new cost and new effective date will overwrite the original deduction and could prevent it from being taken on its final payroll(s) if your payroll partner does not keep the original deduction active through its 'deduction end date'.

For example, let's say an employee is enrolled in Medical as of 1/1 for $75 with the code MDCL.  If a life event is processed on 4/26 to drop a dependent with a new effective date of 6/1 and a new cost of $30, then the original deduction of 1/1 for $75 will now show in Payroll as 6/1 for $30 attached to the matching code, MDCL.  This means that there is now a sole deduction in payroll with a start date of 6/1. No deductions will be taken between today and 6/1 if your payroll partner does not keep the original deduction active through its 'deduction end date'.

Options for HR

In order to circumvent having your payroll deductions overwritten if your partner does not keep the original deduction active through its deduction end date, HR has the following options:

• Set all commonly used Life Events to 'Approval Required'.  Ensure that the final payroll that should include the original deduction has been processed, and then approve the QLE to transmit the new cost and new effective date to payroll.
• Uncheck all commonly used Life Events to ensure they are not Employee Visible.  Ensure that the final payroll that should include the original deduction has been processed, and then process the QLE to transmit the new cost and new effective date to payroll.

Both of these options will ensure there is no possibility of a lapse in deductions being taken in full.