GoCo's Embedded Payroll is designed to seamlessly integrate with the Benefits Administration Module, ensuring that benefit deductions and contributions flow smoothly into payroll. Here's a breakdown of key features and considerations:
Background for Payroll and Benefits Administration
Automatic Flows to Payroll
GoCo’s system automatically syncs benefit-related data to payroll, reducing manual errors and ensuring compliance.
What Auto Flows:
- Employee deductions for benefits (e.g., health insurance, HSA).
- Employer contributions for benefits.
- Catch-up deductions for missed contributions or deductions.
Why It Matters:
This automation ensures deductions and contributions are consistent across all pay periods without manual intervention.
Let’s continue reading to see how the Benefits Administration Module and Payroll work together!
What Is Controlled by the Benefits Administration Module?
Deduction Settings
When benefit policies are built, the full monthly amount is entered in GoCo. The company contribution is then applied, and the employee contribution is calculated as the difference between the full plan amount and the company contribution.
Per Pay Period Deductions:
Employee contributions are broken down per pay period based on the payroll schedule (e.g., Weekly, Semi-Monthly).
Proration & Benefit Deduction Period Settings
Proration settings determine how deductions are calculated for mid-period benefit start dates.
Proration Behavior:
- When on, partial deductions apply to employees whose benefits start mid-pay period.
- When off, full deductions are applied regardless of the start date.
Benefit Deduction Periods:
- Although Administrators cannot edit these, GoCo staff can on their behalf and configure deductions to align with current pay periods or arrears (based on the work period).
Company Classes
Company Classes in GoCo allow you to segment employees by group for benefits purposes including payroll deduction amounts.
To get to the page below, visit your Benefits App > Overview Tab > Eligibility Section
How It Works:
- Assign employees to specific classes based on job roles, locations, or eligibility.
- Configure benefit plans and deductions to apply only to certain classes.
Why It’s Useful:
- Simplifies management of varied benefit offerings across a diverse workforce.
- Ensures compliance with eligibility criteria and plan rules.
Benefit Caps (HSA, FSA, DCA)
GoCo tracks and enforces contribution limits for benefits like HSA, FSA, and DCA.
HSA Caps:
- The IRS sets annual limits for individual and family contributions.
- GoCo monitors contributions to ensure compliance and avoid over-contributions.
FSA & DCA Caps:
- Contributions are capped annually by IRS guidelines.
- Administrators are alerted when employees approach or exceed these caps.
Talk with your broker or support if you need additional clarification for Benefit Settings!
During Payroll Processing
Catch-Up Deductions
What They Look Like:
- Catch-up deductions occur when a missed deduction is applied retroactively in a subsequent payroll. They can also occur in the case of an employee being refunded for an overcharge.
- These deductions are flagged in the pay run for visibility and are applied automatically to align with missed or adjusted benefit periods.
Common causes include:
- A new hire’s benefit setup after the payroll cutoff.
- Adjustments to benefits mid-cycle. This can be in relation to a single employee changing their benefits or in relation to benefit policies being changed by an admin.
- Administrator approvals for retroactive benefit changes.
Important Notes:
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- Admins have one opportunity to approve or adjust a catch-up deduction during the first payroll where it appears. After this, you must edit the deduction if you want to change this later. Doing so will override the adjustment moving forward. Otherwise, the adjustment will run its course and return to Standard after 3-4 pay cycles.
Uneditable Fields
Some benefit-related fields in payroll are uneditable to maintain consistency and compliance. Examples of Locked Fields:
- Catch-up deduction amounts for the first payroll cycle once approved.
- 401k Company Contributions can only be adjusted under the employee deductions section while running payroll as seen in the image above.
Why:
- This ensures that any adjustments align with the approved benefit plan settings and regulatory requirements.
Employer Contributions
If a catch-up or refund is made, GoCo will not automatically adjust the memo and Admins will need to do so manually.
Employer (ER) Memos
Memos are a great way for employers to leave one-time notes for employees that will show on their paystub.
To create a memo, hit the ellipses button next to the user on the payroll grid & select "Add Note".
Why This Is Important:
- Provides clear documentation of company contributions for audits and reporting.
- Ensures accurate accounting of benefits and payroll records.
Additional Information
Taxability of Benefits
Understanding benefit taxability is critical for compliance and accuracy.
Pre-Tax Benefits:
- Reduce taxable income (e.g., health insurance, HSA contributions under Section 125 plans).
- Taxes are calculated after these deductions.
Post-Tax Benefits:
- Are deducted after taxes and do not impact taxable income, but will reduce to gross pay.
Key Considerations:
- Ensure pre-tax deductions comply with federal and state regulations.
- Clearly distinguished pre-tax vs. post-tax deductions on pay stubs.
Key Takeaways for Admins
- Catch-Up Deductions: Approve carefully, as changes lock after approval.
- Automation: Trust auto-sync to payroll but review for accuracy.
- Tax Implications: Know the difference between pre-tax and post-tax benefits.
- Caps & Classes: Stay aware of contribution limits and use company classes to streamline benefits management.
By understanding these features and settings, you can optimize payroll accuracy and compliance while ensuring a smooth benefits experience for employees.
Updated 11.25.24