CAI Payroll Application COBRA Premium Reduction Subsidy

Transcription

1 Application COBRA Premium Reduction Subsidy The American Recovery and Reinvestment Act of 2009 (ARRA) provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. COBRA Specifics Workers who have lost their jobs involuntarily may qualify for a 65 percent subsidy for COBRA continuation premiums for themselves and their families for up to nine months. Eligible workers will have to pay 35 percent of the premium to their former employers. To qualify, a worker must have been involuntarily separated between Sept. 1, 2008, and Dec. 31, Workers who lost their jobs between Sept. 1, 2008, and enactment, but failed to initially elect COBRA because it was unaffordable, get an additional 60 days to elect COBRA and receive the subsidy. The COBRA system has been developed to do the following: 1. Track qualifying employee & employer policy information for employees that have opted into the COBRA plan. 2. Pay third party insurance vendors automatically via the payroll process. 3. Automatically reduce the amount of payroll taxes you have to pay the IRS and report it correctly on the IRS form 941. Summary COBRA Process (see detailed instructions on each the items below) 1. Create the new trust fund for COBRA transactions. (one time only) 2. Set-up the COBRA control file. (one time only) 3. Enter the employees that are on the COBRA a. To set employees up you will need their COBRA policy information. Premium Amount Policy Start Date Policy Number Policy Due Date 4. Create Invoice for each month. 5. Enter the employee and employer paid amounts. 6. Before creating payroll Create the COBRA remittance adjustments. 7. Create/Print the COBRA warrants. 8. Print and review COBRA Reports keep for backup. 9. Continue with the payroll process and create payroll. Revised on 4/23/2009 Computer Arts, Inc. Page 1 of 18

2 Payroll COBRA Control Set-up From the Payroll Main Menu Click the Date Control button on the main toolbar Click the COBRA button on the toolbar Click the Cobra Control File button Section 1 - Percentage Employee % - This is the percentage of the premium amount that the employee is responsible to pay. Employer % - This is the percentage of the premium amount that the employer is responsible to pay. Section 2 Duration of COBRA in months This is the number of months the policy will be active. NOTE: Current federal guidelines state that the policy will be active 9 months from the premium start date. For assistance-eligible individuals, the qualifying event must occur on or before Dec. 31, 2009, and the COBRA subsidy may apply for up to nine months. Section 3 Federal Fund Information Double click on the vendor # field and enter the vendor that you currently use to pay your federal payroll taxes. Enter the fund, department, account and sub-account. NOTE: Typically this would be a salary account that has the majority of payroll run thru it. For example: General Fund. Section 4 Trust Account This should be the new COBRA trust fund that you have created for COBRA. All COBRA transactions should be run thru this new trust fund. This will keep COBRA transactions under one fund and separate from regular payroll transactions. NOTE: If you are administering the employee portion (the employee pays the county their 35%) make sure to AC the 35% payment from the employee into this trust fund. The COBRA remittance process will transfer the counties 65% into this trust fund. For Instructions on creating a new fund use the attached link. Section 5 Medical, Dental & Vision Vendor Set-up Vendor # o This section is divided into the three different types of COBRA insurance you may offer. The system allows you to set-up three different Medical, Dental and Vision vendors. Enter the vendor number that you will be paying for each type of insurance. NOTE: You must fill in the vendor information for at least one type of COBRA insurance. COBRA Administrated by o County Former employee will pay their 35% directly to the county. When county is selected and the warrant is printed for the vendor you have selected, it will equal both the employees 35% and the employers 65% paid. o Third Party Former employee will pay their 35% to the insurance company. When third party is selected and the warrant is printed for the vendor you have selected, it will equal only the employers 65% paid because the employee has paid their 35% to the COBRA administrator. Revised on 4/23/2009 Computer Arts, Inc. Page 2 of 18

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4 ADD ( to add a new eligible employee) From the Payroll Main Menu Click the Date Control button on the main toolbar Click the COBRA button 1. Click the Add button 2. Double click the Employee # box or press F4 on your keyboard 3. Enter termination date (if different than default date) and tab off to load grid (this will show everyone terminated from that date forward) 4. Highlight the desired employee and click the Select button 5. All areas with red arrows are required fields on the Add Employee COBRA Detail window 6. NOTE: All 3 payment types are not required. Must have at least 1 Revised on 4/23/2009 Computer Arts, Inc. Page 4 of 18

5 CHANGE (to change Status) From the Payroll Main Menu Click the Date Control button on the main toolbar Click the COBRA button 1. Highlight the desired employee from within the grid on List Employee COBRA window 2. Click the Change button 3. Click the drop down to change Status 4. Click the Change button PAYMENT RECORDS (Add a invoice, make a employee/employer payment) From the Payroll Main Menu Click the Date Control button on the main toolbar Click the COBRA button 1. Highlight the desired employee from within the grid on the List Employee COBRA window 2. Click the Payment Records button 3. Entering Payments Received Highlight the desired Invoice Click the Change Invoice/Payment button NOTE: Once paid, invoice moves to Paid in grid see radio buttons next to Payment Status Revised on 4/23/2009 Computer Arts, Inc. Page 5 of 18

6 Fill in all payment details NOTE: You can change Premium amount if needed Click the Change button when complete Revised on 4/23/2009 Computer Arts, Inc. Page 6 of 18

7 ADDING AN INVOICE do this each month for each employee From the Payroll Main Menu Click the Date Control button on the main toolbar Click the COBRA button 1. Highlight the desired employee from within the grid on the List Employee COBRA window 2. Click the Payment Records button Click the Add Invoice button Select type of Invoice and Click OK button Fill in next due date Click the Add Invoice button when complete NOTE: You can change Premium amount if needed also Revised on 4/23/2009 Computer Arts, Inc. Page 7 of 18

8 DELETING AN INVOICE From the Payroll Main Menu Click the Date Control button on the main toolbar Click the COBRA button 1. Highlight the desired Invoice 2. Click the Delete button Revised on 4/23/2009 Computer Arts, Inc. Page 8 of 18

9 Fill in reason for Delete Then click the Done button Once deleted, it will show in grid with a Payment Status of Deleted NOTE: Grid defaults to Payment Status of Due Revised on 4/23/2009 Computer Arts, Inc. Page 9 of 18

10 PRINTING INVOICES From the Payroll Main Menu Click the Date Control button on the main toolbar Click the COBRA button 1. Highlight the desired employee from within the grid on List Employee COBRA window and double click to access the Process Employee COBRA Detail window 2. Highlight the desired invoice from within the grid that you wish to print 3. NOTE: Highlight multiple rows to print more than one invoice 4. Click the Prt Invoice button it will print to the default printer Revised on 4/23/2009 Computer Arts, Inc. Page 10 of 18

11 PROCESSING COBRA REMITTANCES From the Payroll Main Menu Click the Date Control button on the main toolbar Highlight the desired run from the List Payroll Date Control window Click the Run Payroll Cycle button on the main toolbar Click the COBRA button NOTE: Prior to creating payroll, you must create the COBRA remittance adjustments. This process transfers the 65% employer & 35% employee (if set up as administrated by County) paid amount to the COBRA trust fund and then creates a warrant. 1. Employee Payments Due but not Paid NOTE: This is an additional reminder that there are invoices due with no payments. No action is needed. Highlight the invoice you desired to add payments for Click the Change Invoice/Payment button to update payments Once payments have been updated and are in the current date range, it will move to the upper grid Revised on 4/23/2009 Computer Arts, Inc. Page 11 of 18

12 2. Click the Create Remittance Adj button Click the OK button a remittance has been created for this data 3. Click the Create Warrant button Change Date if needed and click the OK button Select printer and click the OK button Revised on 4/23/2009 Computer Arts, Inc. Page 12 of 18

13 REPRINTING WARRANTS From the Payroll Main Menu Click the Date Control button on the main toolbar Click the COBRA button 1. Highlight the desired employee from within the grid on List Employee COBRA window 2. Click the Re-Print Warrants button 3. Highlight the warrant you wish to reprint 4. Click the Re-Print Warrants button 5. Select printer and click the OK button 6. Load check paper and click the OK button Revised on 4/23/2009 Computer Arts, Inc. Page 13 of 18

14 \ Revised on 4/23/2009 Computer Arts, Inc. Page 14 of 18

15 Application COBRA Reports As a result of the COBRA changes we have created 3 new COBRA reports and modified the IRS form 941 report. 1. COBRA Invoice (PRCB03) 2. COBRA Detail Report (PRCB04) 3. COBRA Summary Balance (PRCB01) 4. IRS Form 941 (PR941) COBRA Invoice If you choose we have added the functionality to print an Invoice. To print an invoice you need to be on the Process Employee COBRA Detail screen. (see detailed documentation for instructions on how to print an invoice) Revised on 4/23/2009 Computer Arts, Inc. Page 15 of 18

16 COBRA Detail Report The COBRA detail report was designed to be used as backup support documentation to meet the reporting requirements from the IRS. The filter gives you the option to print detailed information for the following payment statuses: Paid, Due, Past Due, Warrant Issued, and All. Payment Status = Paid An invoice will be in a paid status when both the 35% and 65% have been entered as payment received and it is ready to have a warrant issued. Payment Status = Due A status of Due means that both the 35% and 65% have not been paid yet and the current date is not past the due date. Payment Status = Past Due A status of Past Due means that the 35% and 65% have not been paid and the due date is past today s date. Payment Status = Warrant Issued Warrant Issued is the status you would use to identify the amount of COBRA payments you have made. The employer paid amount should match the amount on the COBRA box on your IRS form 941 as long as you enter the date range for the same quarter you are running for your form 941. Payment Status = All Selecting the status of all will display all payment statuses for all dates. Revised on 4/23/2009 Computer Arts, Inc. Page 16 of 18

17 COBRA Summary Balance Report The purpose of this report is to aide in balancing to the IRS Form 941 report. When running this report you need to enter the same date range for the quarter of the Form 941you are balancing to. Use the summary information at the bottom of the report to verify the amounts on your IRS Form 941 report. Revised on 4/23/2009 Computer Arts, Inc. Page 17 of 18

18 IRS Form 941 Report This report has been modified to stay in compliance with the IRS. Revised on 4/23/2009 Computer Arts, Inc. Page 18 of 18