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.

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.

Registration Now Open for Payroll Webinar

After posting our two-parter blog post about how to choose the best payroll software, many of you have asked for a webinar dedicated to this very topic. You asked, and we answered.

2011 ASCENTIS WEBINAR SERIES

MARCH 2011: What To Look For When Evaluating a Payroll System

Choosing and deploying a new payroll system can be a scary and
intimidating proposition.

For the first time payroll purchaser, there is a lot
to know and a lot to learn, and there is an overwhelming
amount of information available. For those organizations
that have experienced a painful and disruptive payroll
integration in the past, it can virtually paralyze the
decision-making process.

Or perhaps a company is looking for a new solution
because their current system doesn’t provide the
functionality, control or convenience that they need to
produce an error-free payroll on time, every time.

Ascentis understands the complexities and
pitfalls of this
process!

In our 27-plus years of being
in the payroll business, we’ve listened to many
situations just like these. That’s why we’ve developed
this webinar — because we can offer guidance around how
to shop for a payroll system that will meet your needs
now, and for years to come. We’ve developed a list of
issues and considerations some our many satisfied clients have told
us they wish they had thought about before purchasing a new
payroll system, such as:

How should a payroll solution integrate with
various accounting systems?
What other products should connect to the payroll system to make
our organization more automated and integrated?
How can robust reporting capabilities help me find errors before they become a concern?
What is SaaS-based payroll and what are its
advantages?

Don’t let fear of change — or of the past — keep
you tethered to a system that isn’t working optimally
for your organization. Register now for this webinar
(links on above right) so you can be on the path to finding the best provider for your needs and circumstances.

Wed., March 16, 10 am, PST*

Wed., March 23, 10 am, PST*

*Space is limited.
Webinar runs no more than one hour.

Reserve your seat now.

After registering you will receive
a confirmation e-mail that contains
attendance information.

Want to know more about how Ascentis does Payroll? Want to hear it from our customers? Here’s a video of Rhonda Thompson from Mandarin Oriental Hotel Group, talking about her experience with Ascentis and Ascentis Payroll.

Click here to watch our other videos.

Quarterlies and the New HIRE Act Credit

Now that we’ve all heard about the HIRE Act and your company has decided whether to apply for the HIRE Act credit and you’ve collected the W-11 affidavit how do you go about getting the HIRE Act credit?

You may reduce your tax liability on a pay period basis by the credit, but in order to actually get the credit you need to make sure to complete the appropriate lines on your 941.

Make sure to prepare for the quarterly filing because unlike COBRA, where you could take the credit in the next quarter, the credit for the first quarter on the HIRE Act must be taken in the second quarter and the credit for the HIRE Act for each quarter after the first quarter must be taken in the quarter the wages are paid. This means if you aren’t prepared you may have to file amendments in order to receive the credit for the HIRE Act.

New Lines on the Form 941 –

Line 6a – Number of qualified employees first paid exempt wages/tips this quarter

This is simply a field which counts the number of employees that were hired and paid for the first time during the quarter you are reporting that are exempt from the employer portion of the social security tax under the HIRE Act. Basically this field lets the government know how many new employees were eligible for the HIRE Act during the quarter being field.

Line 6b – Number of qualified employees paid exempt wages/tips this quarter

This is simply a field which counts the number of employees that were paid during the quarter you are reporting that are exempt from the employer portion of the social security tax under the HIRE Act. This count would include the employees that are reported on line 6a. Basically this field lets the government know how many employees in total on the quarterly return were eligible for the HIRE Act during the quarter being field. Continue reading →

Ascentis Blog

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

Tag Archives: payroll processing