Options for W2 reporting of Health Care Costs starting in 2012
Option 1: Use a Non Cash Earn Code to report Aggregate Health Care Costs
This option will work well for employees who already have default earnings (set up as salaried employees typically). If you decide to set this up on an hourly employee as a default earning just keep in mind that this will bring that employee into PHAHOUR at a disposition 20.
Access the PTREARN Rule Form and build a non-cash earn code (see screen shot below for how it should look).
Access the PTRECLS Rule Form and add the new non-cash earn code to the appropriate employee classes on the Eligible Earnings tab.
Access the PTRBDCA Rule Form and exclude the new non-cash earn code from all benefits/deductions including taxes.
Access Employee’s NBAJOBS form and go to the Default Earnings Tab. Add in a new effective date and arrow down to a new record. Enter in the Earn code, 1 in the Hours or Units field and the aggregate cost on a per pay period basis in the Special Rate field for that employee.
Access the PXAREPT form and enter in the Tax Report Code W2. Next Block and then arrow down until you get to Box 12DD – Health Plan Costs. Next Block into the Earn Code block and enter in the non-cash earn code.
The non-cash earn code will pull through each pay period, but will not feed to finance.
Option 2: Use a Benefit/Deduction Code to report Aggregate Health Care Costs.
Access the PTRBDCA form and build a new deduction code using a calc rule 11 to build plan options, but enter in the Aggregate Health Cost in Amount Field 2 (Employer Amount). Check the number of deduction or contribution frequency appropriate to the pay periods you want it to process through payroll. Go up to Options, Labor Distribution Overrides and enter in a suspense account assigned by Finance for both the Employer Expense and Employer Liability.
Access the PTRBCAT form and assign the new deduction code to the appropriate Benefit Categories.
Access Employee’s PDADEDN form and assign the deduction and appropriate plan option for the employee.
Access the PXAREPT form and enter in the Tax Report Code W2. Next Block and then arrow down until you get to Box 12DD – Health Plan Costs. Next Block into the Benefit or Deduction Code block and enter in the new deduction code and set the Deduction Amount Indicator to Employer Amount.
Process the deduction as usual through payroll. The deduction employer amounts will feed to finance, but it will hit the assigned suspense account where finance can take action to remove the transactions.
Option 3: Update the PERDTOT table using SQL
Access the PTRBDCA form and build a new deduction code using a calc rule 11, but do not build any plan options. Leave all of the Deduction or Contribution Frequency checkboxes unchecked.
Access the PTRBCAT form and assign the new deduction code to the appropriate Benefit Categories.
Access Employee’s PDADEDN form and assign the deduction to the employee making the status of the deduction ‘Waived’. You can also use PTRBDMC Benefit/Deduction Mass Change Rules and PDPBDMC Benefit Deduction Mass Change Process to mass apply the deduction to employees with the appropriate Benefit Category(ies). The PDPBDMC process reads the rules set up on PTRBDMC and will create deduction records accordingly on PDADEDN. Upon running the PDPBDMC process you can verify results by looking at the .lis file. The .lis file will show you each employee it created a record for or if it couldn’t the reason it couldn’t create the record.
You can refer to the HR User Guide for help with running the PDPBDMC process and the HR Online Help for help in setting up PTRBDMC. Below are two screen shots 1) an example of set up for PTRBDMC and 2) example parameters for running PDPBDMC:
Example of PTRBDMC set up:
Example of PDPBDMC parameters:
Access the PXAREPT form and enter in the Tax Report Code W2. Next Block and then arrow down until you get to Box 12DD – Health Plan Costs. Next Block into the Benefit or Deduction Code block and enter in the new deduction code and set the Deduction Amount Indicator to Employer Amount.
Create a file that maps to the PERDTOT table as follows:
Load data directly into PERDTOT using SQL, SQL Loader or similar tool.
This option will not process through payroll or feed to finance, but will report on the W2 at the end of the year.