Employer Provided Healthcare Coverage Reporting

Back in January of this year, we provided a HealthCare Reform Checklist. On that checklist was a reminder to all to “Consider necessary changes to your payroll system in preparation for compliance with the requirement to report employer-provided health coverage on Form W-2. Reporting by employers is optional in 2011.”

This is a timely update to that post.

A week from today, on Monday 10/31 at 11:oo am PST, the IRS will be holding a webinar about the requirements for reporting on employer sponsored health coverage. You’ll learn what changes employees will see in the future on their Form W-2 when reporting becomes required. You’ll learn WHEN you’ll be required to start reporting. The IRS will also talk about transitional relief for specific employers, plans and situations. Furthermore, you’ll learn which employers will need to report, how you will be required to do so, and what valuation methods employers are allowed to use to determine the amounts to report on Form w-2.

Ascentis Payroll already fully supports this reporting function. If your current payroll provider doesn’t, you should consider changing partners. If you’re an Ascentis customer already, and you have questions about getting this reporting function set up, please contact your Ascentis representative.

For an informative (and fun) lesson on what to expect for upcoming changes in healthcare reform, and what is required of you, the employer, watch the video below from the Kaiser Foundation.

Building a Business Case to Purchase an HRIS, Part 4

Building a Business Case, Part 4

While attendance management may seem like the most basic and simple of HR tasks, it presents more problems than are initially obvious. Ask yourself, “Can I rely on all my managers to consistently log my employees’ sick or vacation days?” If the answer is “no,” you are unnecessarily accruing liabilities that affect your company’s bottom line.

The main areas that can benefit from automation are time clock management, and vacation, sick, and other time off policies. Many employees don’t keep track of how many vacation days and sick days they are entitled to or have taken. If you ask any HR manager for the most frequently asked question they receive, they’ll most likely repeat, “How much time do I have available for my vacation today and how much will I have in one month’s time?” It’s one of the most common inquiries an HR department has to deal with and one which frequently equates to time and effort wasted on a mundane tasks executed by highly-paid HR professionals.

What if an employee could log onto a secure HR system and simply look up the information they need? Easier still, what if that system could easily show the employee the amount of leave taken and allow the employee to make online leave requests? From a departmental manager’s standpoint, imagine theses processes:

An employee makes a request for vacation.

The employee’s manager receives an email from the employee requesting time off. If the manager happens to be out of the office or unable to acknowledge the request, the email will automatically be forwarded to another decision maker. Once the request is received, the manager can use a calendar view to check whether the request will clash with other department members’ absence. The manager can also verify at this time that the employee is titled to the time off.

Then the manager can simply accept/reject the time off request accordingly. If the vacation or medical leave request is approved, every system from HR, to payroll, to benefits, will automatically be updated. Calculation of vacation time is frequently a contentious issue. If it is sloppily managed, employees can frequently take more paid vacation time than they are entitled to, because no one can prove they haven’t taken it. Online leave request ensures that leave is taken and that leave requests are accounted for.

And take for example a terminated employee. You would typically pay a salary for leftover vacation. If proof of what has been taken is clearly available, it can make the whole termination process run much more smoothly.

If absenteeism is becoming a problem, automating the reporting, management and logging of sick days is a good way to track and control whether there is an issue. A good attendance management system should be largely self-managing. Once you have defined your unique business rules, the HR department should have to expend little or no effort in ensuring that it is running smoothly. Having a single, electronic access point, directly integrated to the payroll system offers a very easy solution to these issues.

This four part series covered four of some of the most important justifying factors to make your case for purchasing an HRIS. Cost savings and productivity gains occur through the automation of routine day-to-day tasks Compliance, integration to Payroll and benefits carriers, and easy to use interface and powerful reporting capabilities.

Want to know how much you can save by automating HR tasks, compliance, integration with HR, and implementation of benefits management tools? Try our savings calculator – a simple and easy to use web application. Just answer a few simple questions, enter your name and email address, and we’ll tell you how much your company can save annually by automating this task.

You can also read some of these case studies to hear how our customers have improved work flow, saved time and money, reduced labor costs within HR and Payroll departments, and increased employee satisfaction.

We’re happy to answer any questions you may have about purchasing an HRIS, or about any products within our integrated human capital management suite. It’s easy. Just fill out this this form or call Ascentis at 800.229.2713.

Building a Business Case to Purchase an HRIS, Part 2

Building a Business Case, Part 2

In our last post, Building a Business Case to Purchase an HRIS (Part 1), we covered the first main reason to purchase an HRIS – elimination of costly errors.

In Part 2, we’ll be talking about Compliance.

Reduce risk by automating compliance

Compliance is a hot topic nowadays. It isn’t necessary to be willfully negligent to be confronted with serious and very expensive problems. Even the most compliance conscientious employer who meets the variant interpretations of specific regulations may encounter unexpected litigation and find their efforts fruitless. Many companies presume that they are adhering to strict regulation guidelines when in fact they’re at fault for violating a compliance specification located somewhere in the fine print.\

For instance, an average of 450 employment lawsuits are filed in the U.S. each day, and 57% of companies have been named as defendants in at least one employment related lawsuit in the past five years. A simple google search of the term “employment lawsuits” results in over 17 million results. Lawsuits by disgruntled employees are one problem. But nowadays, a company can face suits from candidates who were never hired, as well as from former employees months after termination.

Compliance with federal and state regulations involves a mind-boggling array of topics, most of which fall within the purview of the HR department. OSHA, FLSA, COBRA, EEO, VETS, SOX, and EDA all have minutely detailed requirements, many of which are open to individual interpretation, and they all have severe penalties for infraction. It is a never-ending, full-time task to keep up with these requirements, ensure corporate compliance, and follow the required reporting procedures. Human error is seldom seen as an acceptable defense in cases of compliance infraction.

Compliance automation plays a critical role in both preventing violations by ensuring that requirements are automatically monitored and fulfilled, and in defending alleged compliance violations. The best defense against an alleged violation is a watertight reporting system and automatic documentation of everything related to a specific case.
For example, in a case of proving OSHA compliance, an updated, organized on-line injury reporting system in the factory is going to carry more weight than the standard illegible notebook. In addition, some compliance authorities, such as VETS-100 and COBRA will waive strict reporting requirements if it can be proved that appropriate data collection and tracking systems are being used.

Ascentis HR can reduce the likelihood of error as well as reduce the workload for HR staff in collecting such compliance information by providing compliance automation. The powerful report wizard can quickly generate reports such as EEO-1, VETS-100 and OSHA incidents reducing time spent on generating these reports as well as covering any liabilities in case of lawsuit.

Curious about how to make your company more compliant? Ask for more information by filling out this form or call Ascentis at 800.229.2713.

What is it Worth to You?

When considering automating payroll and time and attendance, many employers balk when they ask themselves how much the system will cost to implement. In the current regulatory enforcement-focused and litigious business environment, the answer may be entirely pragmatic: how much money do you not want to pay in a wage and hour investigation or lawsuit?

The American Payroll Association (APA) perrformed a study in the early part of the last decade that has become a benchmark for return on investment estimates when automating payroll and time and attendance systems.

The APA study found that employee time theft, where employees clock in late, clock out early and take long lunches and breaks, averages 10 minutes per employee per day; payroll personnel take 5–6 minutes to reconcile and calculate each time card each pay period; human error costs 1%–8% of total annual gross payroll. Using these three statistics, a Washington Business Journal article estimated the annual savings of automating the payroll process for a 25 employee company that paid an average wage of $10 per hour amounted to $8,400.

A different study estimated that the cost of unearned paid time off (PTO) averaged a conservative estimate of half a day per employee per year. Unearned PTO occurs when employees take advantage of manual time off tracking systems to take time off they haven’t earned.

Combining this fact with the APA’s findings and assuming full-time work with no overtime, employers who use manual payroll processes may pay an estimated additional 3.4% in effective wages to each non-exempt employee compared with their raw hourly wage rate. So, an employee earning federal minimum wage of $7.25 per hour could effectively cost an employer $7.50 per hour.

These raw estimates make a very effective case for automating payroll and time and attendance. Once implemented, the savings compound. (See how much by using this webapp.) Employers get back most of the 5–6 minutes per timecard per pay period, which gives time back to payroll and HR to focus on other strategic initiatives that save more time and increase productivity.

Ascentis Blog

Information to help HR and payroll managers, recruiters, and compliance officers become more effective.

Tag Archives: Compliance