DIOCESE OF SIOUX CITY

Transcription

1 DIOCESE OF SIOUX CITY Chancery Date: June 12, 2018 To: Business Managers, Bookkeepers, Active Priests & Administrators From: Julie Mahaney and Margaret Fuentes, Administration & Finance Re: Payroll Updates for Effective July 1, 2018 Prior to the start of each fiscal year we recap the payroll and benefit changes to assist you in updating your employee records. This was initially provided at the Business Day meetings April 26 th and May 1st. Employee Compensation & Benefits Effective July 1, 2018 Please note that your location should have similar benefits for all employees. For example, for parishes that merged July 1, 2017 or will merge July 1, 2018, all employees regardless of which parish the employee was previously with, should earn the same amount of paid time off (PTO) or vacation/sick time. Employees at one location should not receive a greater benefit than those at another. The employee benefits should be identified in your Personnel Policy Manual. 1. Employee Salary Changes must be in writing and approved by the pastor and finance council (for schools, the president/administrator and school board). Complete the following: a. Update the employee records before processing July payroll to reflect any increases. b. Enter the tax allowances and filing status from the federal and state W-4s. c. Complete the state tax tab in addition to the federal tab, this is required. d. Unemployment, IA reserve fund and admin surcharges do not apply. 2. Health insurance If your parish has a 7/1/18 parish change that impacts the location where employees are billed, notify Margaret or Michelle ASAP (before ) otherwise the bill will be remitted to the location on file and funds withdrawn from that bank account. a. Please see Attachment A for rates. Good News, these rates did not change! b. PPO plan the amount the location can charge employees for single coverage has changed from up to $50 per month to up to $60 per month. Bookkeepers/Business Managers: Please ensure your pastor and/or administrator knows this is an option. The decision on the amount to charge should have been discussed during the budget planning process and made by the finance council/school board. c. Qualified High Deductible (HD) plan a cost is not passed on to employees for single coverage when choosing this plan. New this year, locations can contribute up to $50 per month to the employees HD plan. The employee also does not need the cafeteria plan for medical deductions, however they may still choose to use it for dental and vision.

2 Also new this year, the locations can deduct HD plan pre-tax employee contributions from the employee paychecks. The employee must complete the High Deductible Health Insurance Plan payroll change form to begin this deduction, noting the amount he/she wants to deduct each pay period. See attached for a sample of the Chancery form which you can use as a guide, this will also be in SmartVault. The locations should provide those employees taking the HD plan the opportunity to open a Health Savings Account (HSA). This can be done with a local bank of the location s choice or with Eagle Ridge which is the same company that the Diocese uses to handle the FSA program. At the business day meetings, we notified you that we would provide guidance on the needed payroll items when using the HD plan. See Attachment B for this instruction. d. Review the July 1 health insurance invoice closely to ensure you agree. e. Update the employee records before processing July payroll to reflect any changes. 3. Wellness Similar to past years, your location will be billed $25 per month for any employee(s) that do not participate in the wellness program. Please note that this is an employee cost, the location should not pay this cost. The employee pays this after-tax. 4. Dental Insurance The rates will change for See Attachment A for the new rates. 5. Basic Life Insurance The rates will remain the same for Supplemental life The rates will remain the same for Reminder, this is an aftertax deduction that is paid by the employee. 7. Opt Out The location may elect to pay employees up to $75 per month if they do not elect the diocesan health insurance (note this has increased from up to $50 from prior years. This should be approved by the pastor and finance council/school board. 8. Cafeteria medical/dependent care plan deductions Update employee records for the deduction the employee identified on the updated Eagle Ridge forms. Mail payments to Eagle Ridge (k) Elective Deferral This continues to be a matching plan, i.e., the location contributes the same percent as the employee up to a maximum. This maximum will change from 5% to 6% effective July 1, a. This will be an automatic increase if the employee is contributing at least 5%, i.e., this will increase to 6%. You will need to update the employee records accordingly. b. If the employee is contributing less than or more than 5%, no change will be made unless the employee completes a deferral form amending their contribution. c. Remember only whole numbers should be used, i.e., 1%-1%, 2%-2%, 3%-3%, 4%-4%, 5%-5%, 6%-6%. Do not use flat amounts, such as $100 or fractions such as 5 ½%. This applies to priests and administrators as well as employees. d. Remember the employee deduction is keyed as a negative amount. e. Continue to submit 401K summary & detail reports by dropping them into SmartVault. These must be via an excel spreadsheet, do not convert to a PDF file or use word docs. f. Funds will continue to be withdrawn via ACH on the 22 nd of each month. g. In the employee record for full time employees that elect 401K, ensure the box is marked on the Payroll info tab that says Employee is covered by a qualified pension plan.

3 Priest Compensation & Benefits Effective July 1, The priest must be paid from one location with the others reimbursing this was required effective July 1, For locations with priest changes on July 10, 2018, pay the incoming priest for the entire month of July. Do not pay the outgoing priest for the month of July. Retired priests will be paid beginning July 1, 2018 by the priest pension plan. 3. The priest should complete the priest compensation option form to elect Option 1, the higher base pay (mileage over 500 miles per month is reimbursed at the IRS mileage rate, currently 54.5 cents per mile) or Option 2, the lower base pay (all mileage is reimbursed at the IRS rate). 4. Determine the base step to pay your priest on. This is based on the number of years he was ordained as of July 1, 2019, e.g., ordination anniversary date June 13, 1989, on July 1, 2019 he will be ordained 30 years, pay him on the 30 to 34 year step starting July 1, For priest changes, obtain a Federal W-4 and State W-4 to determine withholding, also an I Adjust the priest payroll record for the new salary rate, federal and state taxes. 7. Remember the priest does not have FICA withholding, i.e., Medicare or Social Security. 8. Also complete the Iowa tax tab. SUV, IA reserve fund & admin surcharge are not applicable. 9. Only reimburse mileage based on a detailed mileage log. Remember to deduct the first 500 miles driven each month if paid on Option Set up 401K in the same manner as full-time employees, refer to above. 11. Your priest also has the option of electing medical flex. 12. Priest health insurance continues to be paid via ACH on the 22 nd of each month. Monthly rates are being reduced EF as follows: Active priests on basic coverage: $1, Active priests on Medicare: $ Please feel free to contact one of us with questions: For payroll & QuickBooks questions, contact: Julie Mahaney juliem@scdiocese.org Linda Topf lindat@scdiocese.org Jeff Wurth jeffw@scdiocese.org For questions regarding insurance, 401K and/or cafeteria plan, contact: Margaret Fuentes margaretf@scdiocese.org Michelle Steinbach michelles@scdiocese.org

4 Attachment A Lay Insurance Premiums Health Insurance No Change High Deductible No Change Single - Employer $ $ Age $20,000 $40,000 $60,000 Children Only $ $ $1.44 $2.88 $4.32 Spouse Only $ $ $2.16 $4.32 $6.48 Spouse & Children $ $ $3.06 $6.12 $9.18 Working Team $ $ $5.76 $11.52 $ $8.80 $17.60 $ $16.56 $33.12 $49.68 Dental Insurance $31.20 $62.40 $93.60 Single $ $41.40 $82.80 $ Emp & Spouse $67.00 Emp & Child $67.00 Employee Supp Life Rates (per month) Spouse Supp Life Rates (per month) Emp & Dep $ Age $20,000 $30, $1.44 $ $2.16 $3.24 Basic Life Bill rate Benefit $3.06 $4.59 Under 70 $5.50 $50, $5.76 $ $3.60 $32, $8.80 $ & over $2.50 $22, $16.56 $ $31.20 $ $41.40 $62.10

5 Attachment B Qualified High Deductible Plan Payroll Items For the company portion, use the same payroll item as for the PPO plan. For the employee deduction and company contribution to the Health Savings Account (HSA), create a new payroll item. o Use EZ setup, select Insurance Benefits. o Under Other Insurance, select Health Savings Account. o Under How is Health Savings Account paid? select Both the employee and company pay portions. o Under Is the employee portion deducted before or after taxes..? select Payment is deducted BEFORE taxes (section 125). o Enter the name of the Health Savings Account plan under payee and the payment frequency. Select Finish o Once complete, you will see two new payroll items in the list: - HSA Employee (Pretax) Open this payroll item and enter the name of the financial institution to which this will be paid. Enter the liability account #22375 High Deductible Plan Payable. You will need to create this other current liability standard account. Link it to #22000 Payroll Liabilities. When complete add this payroll item to the employee record with the amount the employee has elected to contribute, key this as a negative amount. - HSA Company (Nontaxable) Open this payroll item and enter the financial institution similar to the above. Enter the liability account #22375 (above) and enter the expense account as #50920 Health & Life Insurance. When complete add this payroll item to the employee record with the amount the company has elected to contribute, key this as a positive amount. We recommend you set up a memorized report for the HSA employee and company contributions similar to the report you use for 401K, medical flex In doing so, when you create the payroll liability check, you can confirm the amount being paid is correct by reconciling it to the memorized report. You would also submit a copy of the memorized report to the financial institution to support the employee vs company contribution amount. At calendar year end when the W-2s are processed, box 12 of the W-2 will show the code W with the employee and company contribution amount that was contributed to the HSA during the year.