Salary Effective Date for Life and Disability Insurance Calculations. Overview

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1 for Life and Disability Insurance Calculations Modules Affected: Versions Affected: Human Resource Suite (Base H/R) Version 6 and 7 (Software Levels 9.6c3.28 and 9.7c2.28) The discussion of this new feature is divided into the sections shown below. Overview...1 Screen and Processing Changes... 2 PR Employee File... 2 H/R Benefit Type File... 3 Payroll-H/R Interface Program... 5 Employee Life/Disability Insurance Tab... 5 H/R Benefits Management... 5 Using the... 6 Overview COINS Payroll and Human Resource Suite users may handle life insurance and disability insurance. Rate increases can be given at any time during the month and take effect immediately. For life insurance plans and disability insurance plans that are salary based, however, the salary increases are not always effective at the time the increase is entered, and users wanted to be able to control when such salary changes are applied to these plans in H/R. SHAKER has therefore updated Payroll and GUI H/R to allow the entry of a salary effective date for use in life insurance and disability insurance calculations. The changes that have been made to incorporate this update into the COINS system are explained in this document. 01/09/06 1 Shaker Computer & Management Services, Inc.

2 Screen and Processing Changes PR Employee File A new pop-up box labeled For H/R Plans has been added to the Payroll Employee File. It prompts you to enter the (see Figure 1). This pop-up box appears only if all of the following conditions are met: You are connected to the COINS H/R database. You previously installed the Benefits Management component. You change the earning amounts for the employee s primary earnings category. Figure 1. New For H/R Plans pop-up box Enter the date the salary should become effective. This date is ultimately used when creating employee status history records. 01/09/06 2

3 This box also automatically displays the date when the new salary computations will be made. H/R Benefit Type File Changes have been made to the Benefit Type File Maintenance screen (see Figure 2) on the Benefit Type Rules tab. These changes are: The Coverage Lapse Rules label has been changed to Coverage Lapse / Salary Change Rules. The Salary Change Effective On field has been added to the screen. Figure 2. Pension Plan Benefit Type screen Field Definitions Salary Change Effective On Select when you would like the salary change to take effect, as follows: Salary Change - The new salary is used to calculate the insurance plans. 01/09/06 3

4 First Day of Following Month - For the current employee, the system searches for the last H/R status history record where the employee s salary was changed. If there is no such record, the salary is calculated as it is today. If a record is found, the salary effective date is calculated, as explained below. The salary on the status history record is used if the period end date you are running computations for is greater than or equal to the first day of the month following the salary effective date. For example: Previous Salary: 40/hr Salary Changed on: 10/01/05 : 10/15/05 New Salary: 50/hr First Day of the Following Month: 11/1/05 If computations are run for period end date 10/24/05, the previous salary is used. If computations are run with the period end date 11/08/05, the new salary is used, since you have now gone beyond the first day of the month following the salary change. Annual Select a month from the list of applicable months that appear, such as Jan, Feb, etc. For the current employee, the system searches for the last H/R status history record that denotes a change to the employee s salary. If there is no such record, the salary is calculated as it is today. If a record is found, the salary effective date is calculated, as explained below. The salary on the status history record is used if the period end date you are running computations for is greater than or equal to the month entered. For example: Previous Salary: 40/hr Salary Changed on: 10/01/05 : 10/15/05 New Salary: 50/hr Annual: November is checked If computations are run for period end date 10/24/05, the previous salary is used. If computations are run with the period end date 12/05/05, the new salary is used, since we have now gone beyond the month for annual salary changes. 01/09/06 4

5 Payroll-H/R Interface Program The Payroll-H/R interface program that creates life insurance and disability records and runs during Payroll Computations has been updated to use the applicable salary. The program uses either: Information entered in the H/R Employee File; or Information currently stored in the H/R Employee Status History File associated with an effective date. Once employee life/disability enrollment records are entered in H/R, Payroll creates employee deduction and employee company calculation records based on the rules entered in H/R. It can retrieve the salary based on the setting of the new Salary Change Effective On field that was added to the Benefit Type Rules screen in the Benefit Type File in H/R. Employee Life/Disability Insurance Tab In GUI H/R Benefits Management -> Benefits Enrollment, the Employee Life/Disability Insurance tab has been updated so that the totals at the bottom of the tab use the correct salary. H/R Benefits Management In GUI H/R Reports -> Benefits Management, the following Benefit Reports have been updated to reflect the changes discussed in this document concerning the salary effective date. Life/Disability Insurance Premium Billing Report Employee Consolidated Benefits Report Employee Benefits Statements Life/Disability Census Report 01/09/06 5

6 Using the The steps below illustrate how you can use the new. 1. In COINS, go to Payroll -> File Maintenance Menu Company -> Employee File. Select the employee you wish to change. Go to the Earnings screen and change the primary earnings category for the employee. In the pop-up box that appears, enter the you want to use (see Figure 3). Note: If you try to update an earnings category that is not the employee s primary earnings category, the pop-up box will not appear. Figure 3: For H/R Plans Screen 01/09/06 6

7 2. In GUI H/R, go to File Maintenance -> Benefits Management -> Benefit Type File. Select the desired life/disability insurance plan, click the appropriate Life Insurance or Disability button, and then select the Benefit Type Rules tab. The Pension Plan Benefit Type Rules screen appears (see Figure 4). Figure 4: Benefit Type Rules Screen 3. Select the rule record for the benefit group of the employee you selected in Step 1. From the Salary Change Effective On field, select one of the following: Salary Change - The new salary is used to calculate the insurance plans. Once you set up this information in H/R, the plan calculates and updates payroll as anticipated. The Life/Disability Plans calculate based on the employee s newly updated salary. 1st Day of the Following Month The salary change goes into effect on the first day of the following month selected. Annual The salary effective date is dependent upon the month checked. 01/09/06 7