How To Resolve Discrepancies Between Benefits and Deductions

A summary of how to view and resolve discrepancies between Benefits and Deductions in Namely Payroll.

OVERVIEW

We've made a report available that displays employees who have discrepancies between their Plan Benefit and Deduction records.

Our Benefits Administration platform is designed to align plan costs and deduction amounts through mapping, but occasionally discrepancies can arise when manual changes are made to either record.

While some discrepancies may be desired, deductions and benefits are typically aligned, so we recommend that you review the employees this report flags to ensure they're set up properly. This article explains how to resolve the discrepancies this report flags.  

TYPES OF DISCREPANCIES 

The report contains a column titled Reason for Discrepancy, which will advise you on the nature of the discrepancy your employee has. There are three different types of discrepancies this report flags, and below we'll explain what each one means, what impact it might have on the employee if it's not resolved, and how you can resolve the discrepancy. 

After you have identified the type of discrepancy, you should review and adjust the benefit, the deduction, or both to ensure the information is correct. Each discrepancy has a couple of options for resolution. Choose the one that best fits your situation. 

Benefit Without Deduction

This means that an employee is enrolled in a Plan Benefit that is mapped to a Deduction at the Company Level, but the deduction is either not present in their profile, or the start dates of the plan benefit and deduction do not match.

If an employee is not being deducted for a benefit in which they've been enrolled, they may eventually owe money back to the company.  

  • If the employee should have a deduction, we recommend adjusting information on the employee’s deduction page. It's possible they have the deduction but it was erroneously end-dated. In that instance, you'd want to remove the end date. If they're missing the deduction, you'll want to add it to their profile. Use our article Add/Edit Company and Employee Deductions for step-by-step instructions on how to add or update an employee's deduction.

  • If the employee should not have a benefit, please reach out to Namely via the Help Community case so that we can further assist in making these corrections. 

Deduction Without Benefit With Active Plan

This means that an employee has a Deduction in their profile that is tied to an active Benefit Plan at the Company Level but is not enrolled in that benefit.

The employee could potentially be deducted for a plan they are not liable for. 

  • If the employee should have a benefit, we recommend reaching out to Namely via the Help Community case so that we can further assist in making these corrections. Use our article Add/Edit Company and Employee Deductions for step-by-step instructions on how to add or update an employee's deduction.

  • If the employee should not have that deduction, we recommend adjusting the deduction on the employee’s deduction page by adding an end date. 

    • If you need to update employees in bulk, you should submit a case, and our team can import end-dates for you. 

Deduction Without Benefit With Plan Ended

This means that an employee has an active Deduction in their profile that is tied to a Benefit Plan at the Company Level, but the plan has ended.

The employee could potentially be deducted for a plan for which they are not liable. 

  • If the employee should not have that deduction, we recommend adjusting the deduction on the employee’s deduction page by adding an end date. Use our article Add/Edit Company and Employee Deductions for step-by-step instructions on how to add or update an employee's deduction.

    • If you need to update employees in bulk, you should submit a case, and our team can import end-dates for you. 

PAYROLL CONSIDERATIONS

It's important to keep in mind that resolving the data points this report flags will remove them from the report, but the impact from the discrepancy may have implications on reporting, wages (both taxable and non-taxable), or W-2 mapping if you've processed payrolls with the discrepancies in place. After you've made adjustments to your employee' Plan Benefit and/or Deduction, you'll want to consider the below: 

  • If pre-tax deductions were involved in the discrepancy, it's possible that the employee's taxable wages are incorrect. If the discrepancy is isolated to the same quarter, you can adjust the employee's pay by processing a Current Quarter Void. If not, you'll need to partner with our Service team, and amendments may be required. Review our Payroll Corrections article for info on how to process voids or partner with the service team to make adjustments.

  • If your discrepancy crosses calendar years and involves pre-tax deductions or a deduction that is reported on a W-2, you may need to file a W-2c. Read W-2c Basics for more information.

  • If the involved deductions are post-tax - you may be able to correct the reporting of the deduction with a Negative Deduction (if the discrepancy is isolated to the current quarter) or by paying the employee using a Nontaxable Reimbursement Pay Type Code.

  • Some wages impact W-2 reporting - some examples being reporting the Cost of Healthcare in Box 12DD, or reporting on Dependent Care FSA. You'll want to make sure those wage amounts are corrected for proper reporting, including employer contributions in some scenarios. W-2 reporting requirements can vary based on a number of factors, so we recommend reviewing with a tax expert. 

  • Some discrepancies can result in an employee owing money for a plan they haven't been deducted for. You may need to work with the employee to set this straight.

BENEFITS ADMINISTRATION CONSIDERATIONS

Discrepancies are often caused by improper deduction mapping in your Plan Setup. Once you've resolved your employee data issues, we recommend reviewing the plan involved in the discrepancy to ensure the correct deduction is mapped to it to ensure there are no future discrepancies. This is accomplished on the Plan Settings page in our Plan Setup Assistant. To review: 

  1. Click Manage Benefits from your homepage.

  2. Click the three dots next to the plan you'd like to review, and then Edit.

  3. Scroll to the Deductions section on the Plan Settings page. Question 3 asks which deduction the plan should map to.

  4. Ensure you have the proper deduction selected from the dropdown menu. Make changes if necessary, and click Publish & Exit to update your mapping.

  • If the plan is available to Domestic Partners as well (question 4), you should also review the deduction mapping for that portion of the plan. You can select Domestic Partner deduction mapping on question 4c in the Deductions section.

Tip:

A small number of plans are managed in Namely Payroll. If you do not use our Plan Setup Assistant for the plan in question, you can check deduction mapping by going to Namely Payroll > Enrollment Setup > Configuration > Plan. Find the plan from the list and select the proper deduction from the Deduction dropdown. Save your changes.

If you have any questions, please submit a case in the Help Community.