Changes to Benefits with Payroll
What changes will I see in Benefits if I am using BambooHR® Payroll?
Purpose: You may notice a few changes to Benefits Tracking and Benefits Administration when using Payroll. This help guide will outline these changes in Benefits Settings and in the benefit plan setup.
Benefit plan setup
The process for adding benefit plans will remain the same with Payroll enabled, but you may see new or additional fields in each step. The following changes will exist in both Benefits Tracking and Benefits Administration.
If you would like to enroll in a BambooHR Learning Course that walks you through how to set up benefits with Payroll, click here!
Plan Details
The fields within the Plan Details step will remain the same. If you are setting up a retirement, supplemental health, flex spending account (FSA), disability, or "Other" benefit plan, you must specify the plan type. Once you determine a plan type, the Plan Type field will not be editable if the plan has at least one current or scheduled enrollment. Plan type options will vary depending on which type of plan you are creating.
Eligibility
You will need to specify eligibility group settings and set up costs as you would regularly in the Eligibility and Cost step. Note that some plans (mostly variable rate plans) will show "Eligibility" without cost specifications since you will need to determine amounts for each employee's enrollment. When setting up costs for employees included in payroll, any employees with an assigned pay schedule that syncs with Payroll are required to have monthly costs listed in USD. If the plan uses another currency, you will not see it as an option in the Benefits Overview table for those employees.
If you are setting up a 401(k), Roth 401(k), or 401(k) After Tax retirement plan, you will also have the option to enable a Safe Harbor matching contribution for the plan within the Eligibility step. If you allow this, the contribution amounts will adjust according to Safe Harbor rules when processing payroll. Please note that this setting will apply to all 401(k) and 401(k) Roth plans.
Payroll Deduction
The following fields will appear in addition to the standard fields on the Payroll Deduction step when setting up benefit plans using payroll:
- Is the Payroll Deduction pre-tax or post-tax?: If the plan is pre-tax, the option to identify if the plan is reportable on the W-2 (as shown above) will appear. This option will only appear on health or supplemental health plans. If you are creating an FSA plan, options for this field will be Dependent Care Purposes or General Healthcare Purposes.
- Reportable on the W-2?: Check the box if this plan is reportable on the W-2. This question will not appear when setting up supplemental plans with pre-tax deductions.
- When should this benefit deduction start in payroll?: Determine when the first payroll deduction should happen once an employee is enrolled in this plan. This setting will also define when the last deduction occurs after an employee is unenrolled from a plan, but the last deduction will be the one before the one indicated in the rule. Click here for more details.
- Does this benefit deduction happen every paycheck?: Check if this deduction happens every paycheck or not. If it skips some paychecks, you will need to determine below how often the deduction should be taken out. Please note the warning that if the deduction needs to skip some paychecks, you will need to manually suppress the deductions on the paychecks you want to skip when running payroll.
Once a deduction is approved in payroll for a specific benefit plan, Payroll Deduction fields will no longer be editable for that plan in the benefit plan settings. You will need to end the current plan and create a new plan for these changes.
If you have an existing (active or inactive) benefit plan set to pre-tax, and it needs to be post-tax, you need to end the plan and create a new one that will accurately reflect the change in deduction type. This is to protect against affecting historical payroll records adversely. To make a change to the payroll deduction, you will need to end the plan by entering today's date in the Plan Ends field, creating a new plan as post-tax, and migrating the enrollments through the bulk enrollment tool.
When setting up a benefit plan for the first time, you will need to determine the payroll deduction rule (when the benefit deduction starts) on the Payroll Deduction step. Here are the options:
- Two Pay Dates Before the Benefit Starts
- One Pay Date Before the Benefit Starts
- First Pay Date after the Benefit Starts (most common)
- Two Pay Dates After the Benefit Starts
Please keep in mind that the deduction rules are tied to the benefit start date. The start date is based on when the plan takes effect for the individual employee and will automatically adjust for new hires or if the start date is updated on the employee profile.
After you make your selection, the system will show an informational message if your selected deduction frequency overlaps with deductions from another benefit plan.
After you make your selection, a preview box will show you an overview of deduction frequency based on the pay schedule selected below, including the deduction start and end dates and how many pay dates the deduction is active for. This preview feature is dynamic and will change according to what you select.
You can adjust the pay schedule (e.g., Every other week) next to "Preview" to preview deduction dates and number of pay dates based on the pay schedule. All of your pay schedules that sync to Payroll will appear in this dropdown menu.
The payroll deduction rule will be editable up until the first payroll deduction approval, even if you have enrolled employees in the plan. Once the first deduction is approved in payroll, the deduction rule will not be editable for that specific plan. You must end the current plan and create a new one with the new deduction rule.
HSA and FSA plans will not have pre-pay options, meaning you can only set them up to pull the first deduction after the employee's effective enrollment date.
If necessary, you can override the deduction start date on the employee profile. However, the deduction rule set up on the plan level will still apply. Navigate to the employee's Benefits tab, locate the plan, and click Edit Enrollment from the gear dropdown menu. Then, choose the new deduction start date and click Save.
If a benefit plan does not have an end date, the preview box will not display an end date for the benefit plan or the deduction.
In general, if a benefit plan start/end date lands on the same day as the pay date, the correct deduction start/end date rules mentioned above will apply. The following scenarios address unique cases.
When will the deduction happen if my company's benefit plan start date lands on the employee's first pay date and I have chosen First Pay Date after the Benefit Starts?
- If a benefit plan start date is the same as a pay date and the deduction offset is one pay date after, then the deduction start date for the employee will be the same as the benefit plan start date/first pay date.
What will happen if I move benefit plan start date back in time and I have chosen to have the deduction to start one pay date after?
- If a benefit plan start date is moved back in time and the deduction offset is one after, the deductions start date is adjusted to match the new benefit start date. This ensures that the deduction will still be active for the first payroll.
If my employee is included in an off-cycle payroll, will that pay date be included in the deduction date start/end calculation?
- No. Off-cycle payrolls will not be included when determining the first or last deduction date.
This year, there is an extra Friday or an extra pay date. When will the deduction end date be calculated?
- If the benefit plan is in a year that has an extra Friday or an extra pay date, then the correct number of pay dates is calculated for a typical year. This means the deduction may end a pay date early, but the correct amount of money will still be deducted.
I've chosen to end deductions two pay dates after the effective end date, but I moved the benefit plan end date forward. How will this effect the final deduction date calculation?
- If a benefit plan end date is moved forward in time and the deduction offset is two after, the deductions end date is adjusted to be included in the payroll. This ensures that the deduction will still be active for the last payroll.
If you already have your benefit plans set up in BambooHR, you will see a migration modal when first navigating to Benefits settings after having the payroll integration enabled. You will need to go through and determine the deduction schedule for each benefit plan type.
To override the default deduction start and end dates for an individual employee, you can navigate to their Pay Info tab or Benefits tab.
Under the Deductions section on the Pay Info tab, you can edit enrollment deductions dates by clicking on the pencil icon next to the plan name. You can also terminate coverage and manage the deduction end dates by clicking X next to the plan name. Performing these actions will bring up a modal for you to select the right deduction end/start dates.
The rules indicated above when setting up the first deduction date will also be used to determine the last deduction date for employees who unenroll in a plan. The last deduction will be one pay date before the one indicated in the rule and the effective date will be based on the coverage termination date (see below for an example).
The exception to this is if an employee is terminated or resigns. Then the last deduction will be determined based on their final pay date and the following rules apply:
- Active deductions that have no end date are set with an end date that matches the final pay date.
- Active deductions that have an end date after the final pay date are changed to match the final pay date.
- Active deductions that have an end date before the final pay date are not changed. These deductions will end naturally before the final pay date.
End or delete a benefit plan
If you have payroll history tied to a benefit plan, you will only be able to enter an end date in the plan's settings (click on the blue hyperlink) to preserve the data history.
If the plan does not have payroll history, simply hover over the plan record and click on the trash icon that appears. Deleting benefit plans will remove all ability to manage that deduction, and employees will automatically be unenrolled from the plan.
Extend a benefit plan
If you use Payroll, we do not recommend extending a plan's end date if you want to continue using a benefit plan that is already in use and will be ending. Instead, we recommend you use one of the other two available ways to extend a benefit plan.
One way is to create a new plan by duplicating the existing benefit plan for the new coverage period. You can do this by hovering over the plan and clicking on the duplicate icon.
This will take you to a pop-up modal that asks you if you are recreating a plan for next year's open enrollment. If yes, choose the first option to have the plan recreated/duplicated. Note that the plan selection dropdown menu is automatically populated with the name of the plan you are duplicating. This is a helpful way to continue a benefit plan year to year, especially for open enrollment.
Clicking Continue to Duplicate Plan will copy over the plan details from the previous year, but you will be able to change the start date and end date, as well as make any additional necessary changes. However, there are some limitations to what settings you will be able to edit (see table below).
Once you save the new plan, you can use the bulk enrollment tool to enroll your employees in the new plan.
The second way is to click +Add New Plan and select the plan type you are recreating a new benefit plan* for. Then, determine which plan you want to recreate from the dropdown menu within the pop-up modal. Clicking Continue to New Plan will populate the plan with some of its previous settings, allowing you to edit/add the rates and settings. Please see the editing limitations listed in the table below.
Once you save the new plan, you can use the bulk enrollment tool to enroll your employees in the new plan.
*You will need to have at least one existing benefit plan under the plan type you are recreating a benefit plan for. In the example above, the Medical plan type had an existing plan and then I chose to recreate the Health Insurance - Select Med medical plan for the new year.
Keep in the mind the following settings are not editable when copying over an existing plan through clicking Continue to Duplicate Plan or Continue to New Plan. If you need to edit those settings, we recommend choosing the second option in the pop-up modal to create a new plan from a template.
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Do you have employees that need non-benefit deductions? Visit this guide to learn about how to set those up in BambooHR.
Employee and employer contributions
You can add maximum contribution amounts when enrolling an employee in one of the following benefit plan types. See the list below to learn more. Once the employee is enrolled in the benefit plan, the Annual Max and Cap Amount fields will editable for that specific benefit plan on the employee's Benefits tab or under the Deductions section of their Pay Info tab.
Benefit Plan | Plan Type | Employee Pays | Company Pays |
---|---|---|---|
Retirement | ALL except 409A and 501(c)(18)(D) | Annual Max | Annual Max |
Retirement | 409A | - | Annual Max |
Health Savings Account (HSA) | - | Annual Max | Annual Max & Cap Amount |
Flex Spending Account (FSA) | General Healthcare | Annual Max | Annual Max |
Flex Spending Account (FSA) | Limited Healthcare | Annual Max | Annual Max |
Life Insurance | - | Annual Max & Cap Amount | Annual Max & Cap Amount |
Disability | - | Annual Max & Cap Amount | Annual Max & Cap Amount |
Other | Post-Tax Deduction | Annual Max & Cap Amount | Annual Max & Cap Amount |
Other | Commuter Benefit | Annual Max | Annual Max & Cap Amount |
BambooHR® Payroll automatically recognizes the annual maxes for some retirement plans and catch-up amounts based on the employee's birth date in BambooHR. These include 401(k), 401(k) Roth, 403(b), 401(b) Roth, 457(b), and 457(b) Roth.
Deduction Type | Age From | Age To | Federal Limit | Federal Limit Includes Total of Employee Pays & Company Pays |
---|---|---|---|---|
401(k) | 0 | 49 | $23,000 | No |
401(k) | 50 | 130 | $30,500 | No |
Health Savings Account | 0 | 54 | $8,300 | Yes |
Health Savings Account | 55 | 130 | $9,300 | Yes |
403(b) | 0 | 49 | $23,000 | No |
403(b) | 50 | 130 | $30,500 | No |
457(b) | 0 | 49 | $23,000 | Yes |
457(b) | 50 | 130 | $30,500 | Yes |
401(k) Roth | 0 | 49 | $23,000 | No |
401(k) Roth | 50 | 130 | $30,500 | No |
403(b) Roth | 0 | 49 | $23,000 | No |
403(b) Roth | 50 | 130 | $30,500 | No |
457(b) Roth | 0 | 49 | $23,000 | Yes |
457(b) Roth | 50 | 130 | $30,500 | Yes |
Health Savings Account (Single) | 0 | 54 | $4,150 | Yes |
Health Savings Account (Single) | 55 | 130 | $5,150 | Yes |
Flex Spending Account | 0 | 130 | $3,200 | No |
Flex Spending Account - Limited | 0 | 130 | $3,200 | No |
FSA Dependent Care (Single or Married Filing Jointly) | 0 | 13 (dependent's age) | $5,000 | Yes |
FSA Dependent Care (Married Filing Separately) | 0 | 13 (dependent's age) | $2,500 | Yes |
BambooHR does not collect and remit payments for third-party vendors for any benefit plans.