What is Off-Cycle Open Enrollment?

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And 9 other questions you didn’t know you had on the topic. 

Considering off-cycle open enrollment but not sure where to start? We have you covered! Check out our list of 10 common questions around off-cycle open enrollment and the benefits this transition may have for your team.

  1. Ok, first things first… What is off-cycle open enrollment?

The definition of off-cycle open enrollment (sometimes known as mid-year open enrollment) is simple: it is when a company decides, for various reasons, to move their benefits open enrollment from the typical fourth quarter to a different (usually less busy) time of year. Once a company decides to move its open enrollment process to an off-cycle schedule,  some of their employees’ benefits become effective off-cycle as well.

  1. Why would a company consider off-cycle enrollment?

For various reasons but mainly, convenience. Certain businesses (particularly B2Bs) have a very busy calendar year-end, the typical time for open enrollment (with an effective date of January 1). This “end-of-year crunch” sometimes leaves employees rushing through their benefits selection process. Companies that are looking for ways to alleviate the stress and workload at the end of the year, or want to ensure their employees prioritize their benefits enrollment would benefit from an off-cycle enrollment.

  1. Are there other benefits of an off-cycle open enrollment? 

Companies with busy year-ends benefit from an off-cycle open enrollment because it allows their team members to focus on their clients’ needs at the end of year. Year-end is stressful, both professionally and personally, and holiday leave time further shortens the time frame for reaching out to employees and completing necessary enrollment steps and paperwork. Off-cycle open enrollment will help relieve some of that year-end stress.

Smaller companies can also benefit from off-cycle open enrollment since fewer companies are “going to market” (searching for benefit packages) for medical plan carriers and other providers, this allows them to be more attentive. The market saturation during year-end can leave small companies in a time crunch to get any information they can into their team members’ hands. Going off-cycle allows for a better experience for the entire team.

  1. Once a company decides to move to an off-cycle open enrollment, will they continue to process open enrollment off-cycle, going forward?

Yes, companies that choose to do off-cycle open enrollment typically stay on the same off-cycle schedule for the foreseeable future.

  1. Is the first off-cycle open enrollment a good time to re-consider carriers?

Yes! A company’s first off-cycle open enrollment is a great time to revisit benefits options. As mentioned previously, moving off-cycle allows for all decisions to be made at a less busy time of year. This is true internally as well as on the vendor side. Medical providers and other carriers have more time to focus on your team and their needs; therefore, you have more time to compare plans and leverage that information to make the best choices for your company.

  1. When do benefits become effective if a company does off-cycle open enrollment?

Part of the luxury of off-cycle open enrollment is that companies have the ability to choose a benefits effective date that makes best sense with their own business cycle. Typically, companies choose the beginning of a financial quarter, just to keep things as simple as possible.

  1. Do all medical plan carriers allow off-cycle enrollment? 

No. It is important to know that not all carriers offer off-cycle enrollment, so you should work closely with your benefits broker or in-house benefits leadership to ensure you are working with a provider that offers this option.

  1. What happens if an employee, who has enrolled in the off-cycle enrollment benefits, decides to change their medical coverage to a plan elsewhere (e.g., their spouse’s on cycle plan)?

If an employee who enrolled in medical coverage during the off-cycle enrollment decides to change their coverage to an outside plan; the open enrollment session for that plan would count as a life event, and they would be able to do so. Note: If any money was applied towards a deductible (also known as deductible credit) this money will not transfer over to the new “on-cycle” plan.

  1. What happens to the money a team member has paid to their current plan toward their deductible and out-of-pocket maximum when the change to off-cycle open enrollment occurs?

With off-cycle open enrollment, deductibles and out-pocket maximums continue to run on the calendar year. Any money that has been paid into the plan before the open enrollment session will be carried forward and applied to the new plan. This is true even if a company decides to change coverage providers. If changing coverage providers, there is a delay from when the previous plan ends to allow for the claims process to occur before the previous vendor can communicate the funding to the new provider. The delay can take anywhere from 2 to 4 weeks.

  1. How do FSAs and HSAs work on off-cycle open enrollment?

FSA changes can be made during an off-cycle open enrollment or at the beginning of the year. HSA changes can be made anytime during the year. So, if a team member elects a plan during the off-cycle open enrollment that includes an FSA, they can start contributing to the FSA, but they will only have the remainder of the calendar year to use those funds. The FSA’s “use it or lose it” policy still revolves around the calendar year, which means all expenses must be incurred by December 31 of the calendar year. (Remember that employees can file for reimbursement on calendar year expenses up until March 31 of the following calendar year (per IRS regulations)

Great! Is there anything else I need to know about off-cycle open enrollment? 

Open enrollment is one of the busiest times of year for HR teams. If moving it to a less busy time of year makes it easier for your entire team, it may be worth considering.

Contact Mosaic Consulting Group to find out more about specifics and how you can optimize UKG Pro for off-cycle and on-cycle open enrollment.

Prior Year Adjustments and W-2Cs

What is a W-2C?

The short answer: A W-2C is a corrected version of the W-2 form. As simple as that! (not really…)

Most employees will never see a W-2C, but they are needed occasionally. Let’s explore when they are needed, the information you enter in UKG Pro that will trigger a W-2C, what you need to successfully complete any prior year adjustments, and how to report those changes.

What does a W-2C look like?

Since the purpose of a W-2C form is to correct the information on the W-2 form, other than the employee’s identifying information, the only data on the form will be that which is corrected. For example, if you correct an employee’s State Taxable earnings, the form will show the “old” data and the corrected information for State Taxable earnings, but no other data will be there.

What triggers a W-2C?

There are four types of changes that you can make to an employee record in UKG Pro that will trigger a W-2C:

  • Name changes, even something as simple as adding a middle initial.
  • Address changes, whether or not the change impacts the employee’s taxable wages.
  • SSN corrections
  • Changes to YTD taxable wages or taxes withheld

As a Payroll Manager, what kind of issues should I be preparing for?

By now, all your employees should have their W-2 forms. Between now and April 17, you will receive phone calls from employees who want changes made to their W-2s. Not every request should be made, or will trigger a W-2C, but the most common ones that will require some action on your part are:

  • The employee moved mid-year, but taxes were not adjusted.
  • State or local taxes were not withheld in error, either because the location is set up incorrectly, or the employee was marked “exempt” or “block” in error.
  • You’ve already made Prior Year adjustments, but they were made after the W-2s were printed.

What do I need to get started with this process?

  • All the changes you need for your entire organization. You don’t want to make these changes in small batches. We recommend holding all requested changes until late March to be sure that most, if not all, changes can be made at once.
  • Do not try to squeeze these fixes into spare moments through a busy week. Block the time on your calendar to dedicate solely to making these changes.
  • For each problem: the date the problem started (for example, the first pay date in the new location), and if it was fixed, the date it was fixed.
  • Reports, which you will run before you make any changes, and again after you have finished.
    • Examples include:
      • Tax Liability Grand Total – You want this for the entire prior year, and for the 4th quarter of the prior year (this is where all changes will post).
      • Wage Detail and W-2 Detail for each employee for the full year.
  • Summary Payroll Register for the period needing the corrections.
  • Most important, a communication plan. Employees should know that a W-2C is coming their way. They should know when the form is expected, and should know what it covers so they can plan accordingly.

So, what’s the actual process I need to follow?

  1. First, reverse all the impacted checks. To simplify – if there is one check in the middle of the pile that isn’t impacted, reverse that one too. Reversals and adjustments made to the Prior Year will always post to a system-created Supplemental Per Control.
  2. Enter your adjustments. You don’t need one adjustment for each check. Best Practice is one adjustment for each quarter.
  3. Once your adjustments are in and posted, run Tax Recon for the 4th quarter of the prior year. You can run this just for the employees who have had corrections made.
  4. Re-run all the reports that you ran before starting this process. This gives you a before-and-after record of the changes made.
  5. Generate your W-2C forms in UKG Pro.
  6. Once all this is complete, report the changes to the relevant tax authorities and file the W-2C forms with the SSA and the applicable state and local authorities.
  7. In UKG Pro – Open a case, and provide them with the before-and-after Tax Liability Reports, and an Excel spreadsheet detailing the changes that were made – EE name, SSN, taxing authority, amount of change, and file the W-2C copies

For the copy that goes to the Social Security Administration, you will need to set up an account with Business Services Online (BSO).  Start by visiting this page on the Social Security Administration’s website. This page has useful information on the process, and a link to set up an account with BSO or to log in if you already have an account.

Note: UKG Pro was formerly UltiPro.

Simplify Your Year End

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The end of the year is a busy time for most industries, not to mention in our personal lives. Make your Year End easier with the following tips from Mosaic’s very own Year End Subject Matter Expert Aimée Morgan!

Year End Tips and Tricks:

Start By Setting Up Your Rockstar Team
Regardless of the size of your company, a smooth Year End requires the support of several members of your team, as  well as other departments. Make sure your team members know and understand their responsibilities as well as any deadlines that might be approaching. Communicate now with team members in other departments, like Finance and HR, to ensure they are aware that Year End is just around the corner to let them start planning for their piece of the project.

Don’t forget to make extra sure everyone is aware of their role and that you have communicated ownership of each task and accounted for the time required, including: printing W2s, sending W2s, benefits reconciliation, accounting and taxable fringes, communication with employees, and tax setup and reconciliation.

Set Up and Extend Your Calendars
Once you’ve established your team, make sure to set up, extend, and update the following three calendars: Team Calendar, UKG Pro Payroll, and Timekeeping. All three calendars should include Bank Holidays and Company Holidays, as well as the upcoming year’s pay schedule. By establishing the pay schedule and bank holidays within UKG Pro, the system will recognize if a bank holiday falls on a payday and adjust accordingly. By setting up these calendars in your internal team calendar, you will be able to plan in advance if a holiday falls within a processing week and adjust your schedule to allow enough time for you and your team to prepare.

Set up a Supplemental Payroll
Set up a supplemental payroll dated the last banking day of the year (this year, it is December 29th). Even if that day is already a payroll day, set up an additional payroll on that day and use it for any last-minute adjustments or bonuses. Set up this supplemental payroll for all pay groups and prepare yourself for the unexpected. Reach out to your Accounting and HR departments now to get an idea of any taxable fringes that may also need to go in to that supplemental payroll.

W-2 Printing
The easiest thing to simplify this part of Year End is to contact us today! Enterprise customers can completely remove the hassle of printing W-2 tax forms. Once your W-2 files are created, Mosaic can print your team’s W-2 forms and ship them directly to each employee or to the company. It’s that simple! If you do choose to do this internally, remember that you must send a W-2 form to anyone who was paid within the 2017 calendar year. You will also need to be sure to order enough forms (we recommend your employee count + 10%) to account for any special circumstances such as  team members who have moved out of state. If you have more than one component company or have team members in Ohio, Pennsylvania or Kentucky you may need to order more than +10% to account for extra pages. All W-2s must be post marked no later than January 31st, so make sure your postage meter has enough postage before then. Finally, don’t forget to order enough envelopes to ship all of the forms and remember, any extra envelopes can be used next year!

State and Local IDs
You can run a report within UKG Pro Business Intelligence to show if you are missing a state or local ID. If you do this check now you still have time to apply for any missing IDs (this process usually takes a few weeks, with some localities taking even longer). This information may be missing because new locations were added, or employees started working from home. Visit: payroll-taxes.com for information on any state or local taxes you may be missing.

Verify Employee Data
Make sure that the data in your UKG Pro system is clean. Verify employees’ Social Security Numbers by running a report from BI. No employee should have a SSN beginning with the number 9. Also remember to verify SSNs for dependents for your 1095 reporting.

All team members must have an assigned primary location or they will not receive a W-2. Review who is claiming “Exempt” and who is claiming “Block”. If current employees are claiming “exempt”, they will need to re-submit their request for the new year. If an employee is claiming “block,” they are not reporting taxes to the IRS, this may be because they are on a work visa but verifying is always a good practice.

You shoul also take this opportunity to verify and validate all employee’s adresses to make sure all W-2s are delivered to the correct location. Employees move throught the year and often forget to tell their employers.

Tax Recon
Tax Recon should be happening after every payroll or monthly. Year End is a good time to review and verify that everything has been done properly. Compare your Wage Summary Report to your W-2 summary; they should match.

Seize this opportunity
Finally, take this opportunity to change anything you have been unhappy with this is a new year! You have a chance to create or correct new versions of earning and deduction codes to work the way you want them to. Remember that once you set up a code, you cannot change the tax category associated with it, so take your time and plan your new codes appropriately.

We hope these tips and tricks are useful in supporting your work for a successful Year End. For more information, feel free to download our presentation, and don’t forget to follow us on Facebook, LinkedIn and Twitter for more updates.

10 Questions to Answer Before Open Enrollment

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Open Enrollment is just around the corner… Mosaic can help

Before you start your Open Enrollment process, be sure to get together with your team and answer the following questions:

1. When is the Open Enrollment going to be live?
Start with a clear schedule and make sure everyone on the team is on the same page.

2. Are you staying with the same vendors?
The decision to change vendors could have been made earlier in the year, make sure your vendor selections are complete before beginning the process.

3. Will new interfaces be needed or will existing interfaces need to be modified?
Regardless of whether or not you are sticking with your current vendors, review your interfaces and make sure they are working for you.

Now on to more tactical questions:

4. How many deduction benefit groups do you currently maintain and how many will be going through Open Enrollment?

5. How many pay groups and pay frequencies do you have?

6. How many sessions will you need?
If employees have different pay frequencies, pay period start/end dates, or plan effective dates, separate sessions may need to be configured.

7. Are you moving to new plan codes or are you updating the rates on the current plans you have in the system?

8. Are there any custom reports that might be needed?

9. Will you use UKG Pro for Open Enrollment or will you use external vendor or process? If external, how will you import open enrollment data into UKG Pro?

10. Do you have employee communication templates drafted?

Open Enrollment can be daunting, whether you need help answering these questions or need assistance throughout the entire process, Mosaic is here for you. We are dedicated to your success with UKG Pro and our team of experts will make sure that this is your best year yet and that you and your team will shine during Open Enrollment.