This chapter contains the following topics:
The Passport Business Solutions Payroll module provides the following features:
| • | Has employee file maintenance and lists. |
| • | Handles both hourly and salaried employees on daily, weekly, bi-weekly, semi-monthly, monthly, and quarterly pay frequencies. |
| • | Prints a payroll worksheet to assist in gathering payroll input information. |
| • | Allows entering and editing of time-worked information, with an edit list and a register. |
| • | Handles a wide variety of special deductions and earnings, including Regular and Roth 401(k) plans and direct deposits. |
| • | Handles supplemental earnings specifically. |
| • | Automatically calculates standard payroll. |
| • | Allows reports to be stored on disk to save computer time. You may print or view them later at your convenience. |
| • | Prints a payroll register and deductions register. |
| • | Prints payroll checks and a check register. |
| • | Produces a direct deposit ACH file and direct deposit register. |
| • | Can be interfaced automatically or using a batch transfer process to Check Reconciliation to reconcile the checkbook from which payments to employees are made. |
| • | Allows entering, editing, and posting of handwritten checks and adjustments, with an edit list and register. |
| • | Prints a report showing all payroll distributions to general ledger. |
| • | Prints a history report, union deductions report, and hours report. |
| • | Prints a standard quarterly report, a 1099 report (for non-employee compensation), and a year-end W-2/W-3 information report and forms. |
| • | Quarterly reports can be printed in customized formats. |
| • | State quarterly unemployment insurance reports and annual withholding reports can be made on electronic media. |
| • | Direct deposits can be made to multiple employee financial institutions and bank accounts. |
| • | Social security numbers and employee bank account numbers are masked on screens, reports and posting registers. |
| • | Can be interfaced to General Ledger and Job Cost, or can be used by itself. |
| • | Includes password protection. |
| • | Has Help built into the software. |
Passport provides a means of entering, tracking and reporting Affordable Care Act (ACA) information that is called PBS ACA Management and Reporting.
In order to use the Affordable Care Act features and functions in PBS, you must have a PBS license specific to ACA. If you do not, this chapter does not apply to you. To acquire a license, contact your PBS provider.
The Affordable Care Act (ACA) for short, officially called the Patient Protection and Affordable Care Act (PPACA), and sometimes referred to as ObamaCare, reforms the health insurance industry and the American health care system as a whole. The law contains provisions that give Americans more rights and protections and expand access to affordable quality health care to tens of millions of uninsured.
The Affordable Care Act includes a variety of provisions that reform the insurance market and encourage small businesses to offer health insurance. Depending on whether you are an employer with fewer than 50 full-time equivalent employees, 50 to 99 employees, 100 to 249 employees, or an employer with 250 or more employees, different requirements of the Affordable Care Act may apply to you.
The PBS ACA provides the entry of employee ACA data which can be printed on the 1094-C Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns form, 1095-C Employer-Provided Health Insurance Offer and Coverage forms as well as generated in an ACA magnetic media E-file.
See the Affordable Care Act chapter for more information. Also see the Affordable Care Act Glossary.
Easily maintainable controls allows you to set various functions that tailor this module to your business. These controls determine factors such as:
| • | whether distribution to General Ledger accounts is done automatically or manually. If it is done manually, you must enter GL account numbers |
| • | pay factors for overtime and special pay |
| • | the number of hours in your pay periods |
| • | whether meals and tips are to be used for restaurants |
| • | The SUI reporting method |
| • | the check direct deposit mailer form types you choose to use and what gets printed on the form |
The Deductions/Earnings Codes contain the voluntary deductions and miscellaneous earnings that you define in the system. You can define as many as you like. These deductions and earnings may be assigned to any employee permanently or during a check run.
The Deductions/Earnings Report can be printed on request.
You can easily maintain tables of federal, state, and city withholding amounts, earned income credits, employer and employee social security and medicare taxes, and FUI and SUI percentages and maximums. Workers’ compensation premium calculation information is also included and easily maintainable. The Tax Tables List can be printed on request.
Besides the usual name, address, social security number, pay frequency and rates, taxable status and control information, and year-to-date figures, the employee record contains hire/review information and available vacation and sick hours for control.
Each employee can be assigned any of the three fixed deductions (union dues, loan repayment, and wage garnishment), plus up to nine deductions/earnings which you define. The union deduction, as well as any other deduction you define, can be a fixed amount, a rate per hour, or a percentage of gross wages.
You can assign a frequency code to each employee’s deduction/earning to indicate how often it is to be deducted or paid to that employee.
You can print an employee list by employee number or name on request.
In the Time worked selection, you can automatically generate standard payroll transactions (entries) for employees whose pay is being automatically distributed (not designated for manual distribution) to G/L accounts, and is not complicated by overtime, special pay, or temporary deductions or earnings.
You can also enter individual payroll transactions (which you must do for employees designated for manual distribution), or edit any existing payroll transactions, including the ones automatically generated. With the individual payroll transaction, you can enter up to six one-time temporary deductions or earnings. (Meals and tips are entered this way.)
You can process hourly and salaried employees together or separately.
The module also handles supplemental pay such as bonuses or commissions.
A Payroll Attendance Worksheet can be printed to aid in preparing time entries before you actually enter the information.
You can print an edit list for corrections before you go on to the next selection, Calculate payroll.
You can enter up to four weeks of advance vacation pay. (A separate check is printed for each week.) Any attempt to over-pay vacation or sick pay, or to pay a terminated employee, results in a warning message.
Remaining vacation time can be printed on the check stub.
After you have entered and edited all time information, you tell the software to automatically calculate gross pay, taxes and any voluntary deductions. The software calculates federal, state, and city withholding taxes and accommodates multiple state and multiple city payrolls.
You can choose to have taxes calculated on fixed amounts specified for the employee, rather than using standard calculations. (Options must be used in Employees (Enter) to indicate this.)
You can use daily, weekly, biweekly, semi-monthly, monthly, quarterly, and miscellaneous pay frequencies.
After the payroll is calculated, the Payroll Register and Deductions Register are automatically printed. These show full detail of all pay, taxes and deductions for each employee.
The current pay period’s gross pay, social security, medicare, federal, state, and city taxes, net pay, and any voluntary deductions are summarized for the current period and year-to-date. The report also shows employer liability totals for workers’ compensation, social security, medicare, and federal and state unemployment.
You can print payroll checks at any time after the payroll has been calculated. The starting check number is entered at the beginning of the printing procedure.
Provisions are included for restarting check printing from any specified check and, if necessary, to recover from a printer jam. All or specific checks can be voided if desired. After printing checks, a Payroll Check Register is automatically printed, showing each check number, payee name, and amount.
If you are using direct deposit for your employees’ pay, a direct deposit register is printed at the end of each pay run. This shows you the amount that will be transferred to the employee account(s).
There are two types of direct deposit in Payroll: Electronic payment and Report only.
The Electronic payment method has these features:
Using the PBS Payroll ACH Direct Deposit add-on feature during a check run your system will print mailer forms and create a direct deposit ACH file which may be transferred to your bank.
A Pre-Notification feature provides a means of verifying an employee’s bank account information before you start directly depositing the employee’s pay.
For setting up electronic payment direct deposit, read the Implement Positive Pay and Direct Deposit appendix.
Report only provides a printed form of the amounts that must be deposited directly.
The Check Reconciliation (C/R) module can be integrated with any or all of the Passport Business Solutions Accounts Payable, Accounts Receivable, and Payroll packages. Per the setup in C/R Control information there are two types of interfaces:
| • | You may transfer the net pay automatically to C/R during check and adjustment posting in Payroll. |
| • | You can transfer information from these packages by pulling the data into C/R in a batch using Transfer checks/deposits on the C/R menu. |
Using C/R, you can reconcile checkbooks periodically with bank statements and produce a reconciliation report, a checkbook, and a checking account activity report.
Both check and direct deposit payments are sent into C/R. Direct deposit payments may be pre-cleared.
Entering and posting of transactions for hand-written payroll checks and adjustments are provided. Handwritten checks can be entered or computer-written checks reversed, and adjustments can be made to employees’ quarter-to-date and year-to-date totals or to G/L distributions. A Payroll Adjustments Edit List is provided as an aid to doing these actions.
When adjustments are posted, a Payroll Adjustments Register is automatically printed.
You can print a Payroll History Report on request, showing the earnings, taxes, and total voluntary deductions for each check for each employee within the specified range of pay period dates or check dates. A second report showing employer expenses for these checks can also be printed.
You can print a QTD/YTD (Quarter-to-date/Year-to-date) Time Worked Report at any time to show regular, overtime, special, holiday, vacation, and sick hours. Vacation, holiday, and sick pay are also shown. Information for each employee, quarter-to-date, and year-to-date totals are included. (Refer to the Employee Reports chapter.)
You can print a Union Deductions Report on request, showing each applicable employees’ hours, rates of pay, and amount deducted within the selected time period. (Refer to the Employee Reports chapter.)
You can print a report showing estimated Workers’ Compensation premiums. (Refer to the Workers’ Compensation Report section from the Employee Reports chapter.)
You can print a report of 401(k) contributions. Both elective and non-elective contributions are shown. The report can be printed with check detail or summarized by employee. The report can be printed in either check date or pay period data order. (Refer to the Employee Reports chapter.)
You can print a Quarterly Payroll Report, a Year-End Payroll Report, W-2 forms, W-3 form, 1099 forms (for non-employees), and a 1099 Information Report.
Additionally, you can report Federal W-2 information, 1099-MISC information, state quarterly unemployment insurance reports, and state annual employee withholding tax reports electronically.
The software automatically records the distributions to various GL accounts for all payroll activity. You can print a Payroll Distribution to GL Report on request. You would normally do this at the end of each accounting period.
You can either automatically interface this module to General Ledger or use it as a stand-alone product.
Passwords are required to access PBS. A password is a unique code you assign to each individual using the Passport Business Solutions software. Each potential user must first enter a valid password before being allowed to use a protected function.
One of the file utility function is to provide the capacity to recover corrupted data files. Another function is to export the data for conversion to a new PBS version. See the PBS Administration documentation for instructions on using the file utilities.
(pronounced as separate letters) ODBC is short for Open DataBase Connectivity. ODBC is a pipe that connects data from Passport Business Solutions files to popular ODBC compliant spreadsheet and reporting applications like Microsoft™ Excel, Access and Crystal reports. ODBC is a separately licensed software and installation which requires a separate purchase. XDBC™ is the product that allows PBS to interface with your data via ODBC. ODBC only works with the Vision install of PBS.
In Windows you can easily select any one of more of the most popular printers. Additionally, instructions are given to allow you to interface the software to other printers.
Acrobat PDF and HTML file generation provides two ways to save and view reports. You may also send some forms to a PDF file, but checks are not included.
To understand how to use Passport’s Passport Business Solutions Payroll, you should understand some key concepts and words that are used in this module. Major concepts in Payroll are identified in alphabetical order below.
Accounting is the function that provides quantitative information about your company through the collection, categorization, and presentation of financial records.
See ACH or Automated Clearing House
When the manual refers to alphanumeric, it means letters of the alphabet, numerals (numbers), special symbols (*,&,$,etc.) or any combination of all three kinds. In contrast, numeric (or digits), means only numbers.
An adjustment is a transaction that changes existing payroll information, or it can be an entry to record a payroll check you write by hand, as opposed to a check printed by the PBS Payroll system. When entering an adjustment, you must supply all the numbers (gross wages, taxes, deductions, etc.). The PBS Payroll system does not calculate these numbers.
ACH or Automated Clearing House
The ACH Network is a highly reliable and efficient nationwide batch-oriented electronic funds transfer system governed by the NACHA OPERATING RULES that provide for the inter-bank clearing of electronic payments for participating depository financial institutions. The Federal Reserve and Electronic Payments Network act as ACH Operators, central-clearing facilities through which financial institutions transmit or receive ACH entries.
NACHA (National Clearing House Association) is The Electronic Payments Association, out of Herndon, VA, that develops electronic solutions to improve the payment system. For more information on NACHA go to their web site at www.nacha.org.
A path of accounting information that can be followed either forward or backward. A piece of accounting information usually comes from somewhere, or is going somewhere. Part of this information for example, a document number is used to track where it came from, or where it is going. The path made by tracking this information is the audit trail. PBS posting reports and journals are considered audit trail reports. Purging reports are also considered as an audit trail.
Displaying a report on screen will not satisfy an audit trail requirement because the displayed report goes away. Printing to a printer or disk are the best options.
Reconciliation means bringing into agreement. When reconciliation is applied to checkbooks, it means balancing your checkbook, or, bringing into agreement the balance of your checkbook and the balance shown on your bank statement.
A type of data format in which each piece of data is separated by a comma. This is a popular format for transferring data from one application to another, because most database systems are able to import comma-delimited data.
When data is represented in comma-delimited format it is also referred to as comma-separated values, abbreviated csv.
Data pulled from a database or files and represented in comma-delimited format looks something like the following:
Adams, Jane, 42, Chicago, Illinois
Doe, James, 32, San Francisco, California
Jones, Samuel, 18, Dallas, Texas
Smith, Marlene, 64, Trenton, New Jersey
In the example above the columns are Last name, First name, Age, City and State. Each column value is separated by a comma from the next column’s value and each row starts a new line.
Fields may or may not be enclosed with double quotes depending on whether the field itself contains special characters (including spaces and commas).
See Comma-delimited
A cost center is a part of your company (for instance, a department or a regional office) for which sales and/or expenses (and sometimes costs) can be calculated separately from the total sales and expenses of the whole company.
Cost centers also apply to sales. A typical use for tracking sales by cost center is for a company which has several sales offices. By making each sales office a cost center, you can separately track the sales performance of each office.
Refer to the Account Number Format section of the Company information chapter in the PBS Administration documentation for complete information on Cost Centers.
Most of the information you enter into your computer is stored on the disk. In order for computer programs to be able to locate specific pieces of data (within large masses of data), and to be able to process data logically, data must be organized in some predictable way. The Passport Business Solutions accounting software organizes your data for you automatically as it stores it on the disk.
There are five terms you should understand about the way the data is organized:
A character is any letter, number, or other symbol you can type on your computer keyboard.
A field is one or more characters representing a single piece of data. For example, a name, a date, and a dollar amount are all fields. In SQL a field is often referred to as a column.
A record is a group of one or more related fields. For example, the fields representing a customer’s name, address, and account balance might be grouped together into a record called the customer record. In SQL a record is often referred to as a row.
A record in a data file is often referred to as an entry.
A data file is a group of one or more related records. A data file is often referred to simply as a file (without the word data). A file is referred to as a table when using SQL.
The Employee File in Payroll is an example of a data file. Such a file is made up of several records, each of which contains the name, address, etc. for one employee.
Each file is kept separately from other files on the disk.
(There are other types of files in addition to data files. For example, programs are stored on the disk as program files. However, references to file in this User Manual mean data file unless specifically stated otherwise.)
This means Direct Deposit Processing, Direct Deposit Payroll or Direct Deposit Protocol. For Payroll ACH Direct Deposit we use Direct Deposit Payroll. See Direct Deposit below.
A deduction is an amount taken from the wages of an employee by the employer. However, unlike a tax, a deduction is not normally paid to a government agency. Deductions are typically made for voluntary activities such as savings plans, medical insurance, car allowances, etc.
The frequency of a deduction is how often the deduction is taken. For example, a deduction taken every week has a weekly frequency. A deduction taken only once a month has a monthly frequency.
Instead of receiving a paycheck, an employee can choose to have the pay deposited directly into their bank account(s). Alternatively, the employee can choose to have only a portion of the paycheck deposited directly, and receive the balance as an actual check. As a proof of payment a direct deposit mailer can be supplied to the employee.
As used in the PBS Payroll, distribution means either:
| • | The act of allocating amounts (such as wages) to GL accounts |
| • | An amount allocated to a GL account. |
For example, when you pay an employee, you enter (or the computer calculates) information about how much to pay, what taxes to withhold, what deductions to make, etc.
In addition, you distribute (allocate) the amount of the wages to one of your GL expense accounts for salaries or hourly wages, and to your cash account. The Payroll module collects all distributions to GL accounts, and will either print a report summarizing these distributions or will automatically transfer them to the General Ledger module when appropriate (if you use it).
Short for Federal Withholding Tax. It is sometimes referred to as Federal Income Tax Withheld. It is the amount withheld from an income and submitted by the payer to the IRS as an advance payment of the taxpayer's federal income tax.
A 401(k) plan is a deferred compensation arrangement in accordance with IRS Code Section 401(k), whereby an employee can elect to have the employer contribute an amount to the plan on the employee’s behalf. There is a yearly maximum on the amount an employee can elect to defer. This maximum is subject to annual adjustments for inflation. Employees over 50 can elect to contribute an additional amount to the 401(k) plan.
PBS enables an employer to deduct amounts from employee's pay for both regular 401(k) and Roth 401(k) plans. A regular 401(k) plan is a before tax payroll deduction while the Roth 401(k) plan option is an after tax deduction. The former defers income tax until retirement when withdrawals from the plan are subject to income tax while the Roth plan withdrawals are not subject to income tax (including the capital gain portion.)
In addition to elective contributions (described above), employers can provide matching (non elective) contributions. These contributions are not subject to taxation.
Additionally, employees can choose to make additional, voluntary contributions to the plan. Such contributions are after-tax deductions and are subject to all applicable taxes.
For more official and up-to-date information search for 401(k) on the http://www.irs.gov/ site.
As used here, function means one or more programs that accomplish a specific task.
Each selection on a menu for a The Passport Business Solutions module is a function. When you select a function from a menu, one or more programs automatically execute, thereby allowing you to accomplish the task you select.
When your company makes sales and receives payments, this activity affects not only accounts receivable, but also the area of accounting called general ledger.
General ledger is the area of accounting where all accounting records are brought together to be classified and summarized. Financial statements are printed based on this data.
As used here, general means pertaining to many areas. general ledger is often abbreviated G/L or GL.
Ledger means a book where accounting records are kept. (This term evolved from pre-computer times when accounting records were kept exclusively by hand in large books called ledgers.)
A general ledger account is a specific category under which all financial activity of a certain kind is classified. For example, you might have a general ledger account called telephone expenses under which you categorized your telephone bills. General ledger account is often abbreviated GL account.
Typically, an independent business has a hundred or more GL accounts. In the Passport Business Solutions accounting packages, each time any financial activity occurs in any area of accounting, the dollar amount is recorded under the appropriate GL account numbers, defined by the user.
Refer to the Account Number Format section of the Company information chapter in the PBS Administration documentation for complete information on General Ledger Account Numbers.
Help refers to descriptions of functions which appear on your screen by pressing a designated key; <F8> in Character mode and <Ctl+F1> in Graphical mode. The Help text gives you a quick reference to the highlights of the function you are running. See the note in Look-ups
When a set of accounting packages is integrated, any information generated in one area that is needed in another area is automatically supplied to that other area. You do not have to enter the information twice.
Passport accounting software is fully integrated. When Payroll is used with other Passport Business Solutions packages, any information recorded in those other packages which the Payroll module should know about can be automatically transferred to the Payroll module.
There are two kinds of lookups: Data Lookup and Date Lookups.
Data Lookup
Look-ups refer to a list of available entries for a particular field. Many fields allow you to press a designated key <F8> to show all available data on file. In graphical mode you may also click on the lookup button.
For instance, when entering a time worked distribution you may press this key at the Account number field to bring up a list of all G/L accounts on file. Selecting an entry from this list is often easier and faster than remembering the account number or stepping through all possible entries until the right one is reached.
|
Note |
For character mode screens, depending on where you press <F8>, this function will return a Look-up window or context sensitive Help. If a Look-up window is returned, pressing <F8> a second time will display Help for the field if available. |
Date Lookup
The date lookup provides a point and click window for finding and entering date fields.
In Graphical mode the date lookup is available via the <F4> key and clicking on a date lookup calendar button. In Windows Character mode access the date lookup via the <F7> key. For Linux telnet mode there is no date lookup.
Magnetic ink character recognition (MICR) is a character-recognition technology used mainly by the banking industry to ease the processing and clearance of checks and other documents. The MICR encoding, called the MICR line, is at the bottom of checks and typically includes bank code, bank account number, check number, and may have other miscellaneous information.
Multi-Company refers to the capability to do accounting functions for multiple companies with the same set of software.
Payroll defines the wages you pay as an employer to your employees. Payroll is often abbreviated PR.
Payroll taxes are those amounts related to payroll wages that are paid to government agencies. Commonly, four payroll taxes are paid to the federal (U.S.) government: social security tax, medicare tax, personal income tax (federal withholding), and federal unemployment insurance (FUI).
Many states and local governments also assess payroll taxes: additional personal income tax (state withholding), state unemployment insurance (SUI), etc.
The employer and employee typically each pay part of the required social security and medicare taxes, with the employees’ portion being withheld from their pay checks. The employer usually pays the entire FUI and SUI amounts.
To post means to take transactions from a temporary set of data and move them to a permanent location (where other transactions probably already exist). For example, Payroll time transactions are initially entered into the temporary Time Transactions. After the transactions have been entered and edited (pay calculated and checks printed), they are posted to the permanent payroll history.
Often, during transaction posting, other data is also updated. For example, in Payroll, when checks are posted, the year-to-date income, tax and other withholding figures in Employees are also updated.
This is a Direct Deposit ACH verification test conducted with your processing bank to verify the accuracy of the employee receiving bank’s routing/transit number and bank account number.
Processing Bank is the direct deposit bank that will process payments in the ACH file. In most cases, this is your bank. However, if your bank were sending the ACH file to a Federal Reserve for processing it would be the Federal Reserve Bank. This information becomes the Immediate Destination in the CTL Banks setup and gets written to the direct deposit ACH file.
See ACH or Automated Clearing House
Receiving Bank is every unique bank that is used by employees entered in the payroll system for direct deposit ACH processing. The routing information is set up in Ctl Banks.
There can and often will be multiple bank account numbers entered in Employees for each receiving bank.
See ACH or Automated Clearing House
SPOOL is an acronym meaning Save Printer Output Off-Line. Spooling is a technique that allows a report to be printed at a later time. Instead of reports going directly to a printer, they are saved as a disk file (which is usually a lot faster). When a printer is available, all or some saved reports can be printed in one long run (for example, overnight).
Printer command language, also know as PCL, was developed by Hewlett-Packard in the mid 1980's for ink jet printers.
Many PBS forms provide an alignment when using a Company information laser printer. This alignment is done using PCL codes. PBS works with printers that use either PCL 3, 4, 5 and 6 standard. Most PBS payroll check and direct deposit mailer types are affected by this. However, the graphical check and mailer do not use the PCL alignment.
A supplemental benefit is an amount contributed by the employer to a fund from which employees generally have a right to benefits only upon layoff and after meeting eligibility requirements. Supplemental benefit funds are used to augment state unemployment insurance. In the Payroll system, supplemental benefits are calculated and reported only. No G/L distributions are made as a result of these calculations.
Supplemental earning is a special category of earning (such as a commission or bonus) that is usually taxed at the supplemental rate specified in federal and state tables.
As used in accounting, transaction means a business event involving money and goods or services. For example, a transaction occurs each time you fill your gas tank: you pay money in exchange for gasoline (goods).
Because computer software deals primarily with business events which have already taken place, in the Passport Business Solutions software the word transaction means the record of a completed business event involving money and goods or services.
The records of sales made and payments received are examples of transactions from the accounting area called accounts receivable. The records of your purchases and the payments you make for such purchases are transactions from the accounting area called accounts payable. The records of quantities of goods received or sold are transactions from the accounting area called inventory control.
Workers’ compensation is insurance which provides for payment to an employee in the event of certain kinds of on-the-job injuries. The premiums for such insurance are normally paid by the employer to a state or private agency. A few states require that the employee pay part of the workers’ compensation premium.
The following words and definitions relate to the Affordable Care Act. For the use an setup of the Affordable Care Act in PBS, see the Affordable Care Act chapter.
Some of the words in this glossary refer to rules and regulations as of 2015. These rules may change at any time. Be sure to research the latest information on the IRS.gov and healthcare.gov web sites to verify.
1094-C
Form sent to IRS by 2/28 or 3/31 if electronic. Details coverage offered, month by month, for the year. One form per company serves as a transmittal document.
1095-C
Form sent to an employee by any Insurer who has covered them for any month.
ACA Licensing
| • | Licensed Company—This is a Passport Affordable Care Act Management Software licensed user. They are the first company listed and responsible for the license and PUP. The Licensed Company will also be an EIN Reporting Company (see below). |
| • | EIN Reporting Company—This is the PBS company assigned to report on behalf of all PBS companies under a single EIN. There will be one such entity for each Essentials and Corporate license. By definition, Enterprise licenses will have more than one. It is at this level that entities are ranked by size (FT count or total count) for Aggregate ALE Group Members (1094-C, Part 4). In the event an employee works for more than one of these EIN level employers, each EIN will report (1095-C) on behalf of the employee for the months where the bulk of the hours were served. For months where the EIN is not the primary employer, the 1095-C will be coded as “not employed”. If an EIN Reporting Company was never the primary employer for any month of a year, it will not issue a 1095-C for the employee. |
| • | Employee Reporting Company—In cases where an EIN Reporting Company has multiple PBS companies with the same EIN, this is the manually selected company that will report for an employee paid from multiple PBS companies. The Employee Reporting Company number is stored in each Employee ACA record and prevents duplication of 1095-Cs and employee counts. |
Actuarial Value
This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
Actuarial Value is defined as the proportion of covered medical expenses an insurance policy is expected to pay on average for a standard population, as compared to the percentage the insured is expected to pay via deductibles, co-insurance, co payments and other out-of-pocket expenses. An Actuarial Value of 100% means the plan would pay all medical expenses (not including premiums).
Adjusted Gross Income (AGI)
Total income minus specific deductions.
Administrative Period
Following the Standard Measurement period, this is when the analysis is done to determine the employee's full time / part time status and enroll eligible employees in coverage.
It is no more than 3 months. It is only 1 month if the Measurement Period was 12 months (13 month combined maximum).
Single coverage (not spouse or dependents) < 9.5% of household Adjusted Gross Income. Percentage is subject to change each year.
Affordable Insurance Exchange, Health Insurance Marketplace, the Marketplace
Individual employees of ALEs who purchase from these sources are eligible for a Premium Tax Credit and the ALE is subject to the Employer Shared Responsibility payment.
Applicable Large Employer
An ALE is an employer or group with 50 or more combined Full Time (FT) and Full Time Equivalent (FTE) employees.
Cadillac Plan
Cadillac Plan starts in 2018. This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
Excessive and a luxury because it is pre-tax, essentially making it government subsidized and theoretically more likely to be used/abused. Subject to a 40% excise tax if it costs more than $10,200 a year for single coverage and $27,500 for family coverage, including both employee and employer contributions.
Chevron Doctrine
This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
Decided the standards for the intent of the legislation would be used, rather than IRS interpretation.
Code Series 1. Indicator Codes for Employee Offer and Coverage (form 1095-C, line 14)
Code Series 1 classifies type of coverage (if any). This code is to be entered for each month it was offered. If the entry is the same for all 12 months, the 1095-C will automatically fill in the single box Annabelle "All 12 Months". Acceptable inputs range from 1A to 1I.
Code Series 2. Section 4980H Safe Harbor Codes (form 1095-C, line 16)
Code Series 2 classifies Employee's work and health coverage enrollment status as well as Safe Harbor method.
Dependents
For the purposes of the ACA (specifically form 1095-C, line 14), a spouse is referred to specifically as spouse, and is not counted as a dependent.
Employer Mandate (Employer Shared Responsibility Mandate)
This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
Employers required to offer coverage at least 95% of their FT employees or pay a fee.
Family and Medical Leave Act (FMLA)
Used for illness (self of qualifying family member), pregnancy or new child birth, Other (Uniformed Services Employment and Reemployment Rights Act (USERRA) - Military, Jury, etc). Employees on FMLA leave are entitled to continue health care coverage as long as they continue to pay the premiums.
Federal Poverty Level Safe Harbor
This method calculates "affordability" of self-only MEC as the annual percentage (for 2015 it is 9.5%) of the 48-state Federal Poverty Level (for 2015 it is $11,770).
Federal Poverty Line
48 State standard, which for 2015 is $11,770. 9.5% is $1118.15, or $93.18 per month
Currently 30+ hours/week, 130+/month but may be redefined in the ACA Control section as ACA standards dictate. Measured monthly or on look-back (3-12 month evaluation). Owners, family members of the owners, partners, and certain shareholders can be exempt from this calculation.
Total of Part Time employee hours /120 = FTE. If FT + FTE > 50, then the company is an ALE.
Groups
Groups are ACA permitted collections of employees with similar "reasonable criteria". Safe Harbor and Measurement Period methods may be differentiated along these Groups.
Hour of Service
Defined as an hour for which an employee is paid or entitled to payment for the performance of duties for the employer, and each hour an employee is paid or entitled to payment when no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, or leave of absence. Volunteer or Federal Work Study Program (and substantially similar State program) hours are not included. Hours worked outside the US are not included.
Initial Measurement Period (IMP)
New employees whose hours are unpredictable, such as seasonal or variable hour, will have their status determined by looking over a period of time called an “initial measurement period,” which can be 3-12 months. If the new employee was determined to be full-time during the Initial Measurement Period, but part-time in the following Standard Measurement Period, the employee would cease to be eligible for healthcare insurance at the end of the following Initial Stability Period. Conversely, if the new employee was determined to be part-time during the Initial Measurement Period, but full-time during the Standard Measurement Period, the employee would become eligible for healthcare insurance from the following Standard Stability Period.
Look Back Method
This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
For future FT evaluation (in a Stability Period) based on an employee's hours of service in a previous period (the Measurement Period). This is only used for determining and computing liability for an Employer Shared Responsibility payment, not for determining whether an employer is an ALE.
Lower threshold than Minimum Value. Employers can face penalties if they don't offer MEC to at least 95% of their FT employees, but to avoid all Employer Mandate Penalties, ALEs must offer coverage that meets MEC, Minimum Value, and is affordable.
Meets ACA requirement of providing at least 60% of the actuarial value of the total allowed cost of benefits.
Monthly Measurement Method
Employees who work 130 or more hours per month are considered full time.
Qualifying Offer
This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
Meets minimum value for all calendar months during the calendar year for eligible employees who were FT and self-only coverage is less than 9.5% of the Federal Poverty Line (on a per month basis), and includes an offer of MEC to the spouse and dependents.
This method calculates "affordability" of self-only MEC as the annual percentage (for 2015 it is 9.5%) of an employee's Hourly Rate, multiplied by 130 hours per month, multiplied by 12 months per year.
Rule of Parity
This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
If an employee works some amount of time and is them gone and rehired after a greater length of time, the employer has the option to classify them as a rehire and restart the initial measurement period.
Employers may choose from 3 methods to determine household income, which is the base of the affordability calculation; W-2 box 1 wages (yearly), rate of pay(pay period), or Federal Poverty Level (FPL). Standards are to be used uniformly among Groups with commonalities, as designated by the company. For example: Ohio non-union employees.
Work 120 days or less during a calendar year and are exempt from FTE calculation. Marked as exemption code SEA. See the IRS regulations to understand the rules for determining seasonal employees.
Shared Responsibility
This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
Part of the ACA’s Title I. Subtitle F: The federal government, state governments, insurers, employers and individuals are given shared responsibility to reform and improve the availability, quality and affordability of health insurance coverage in the United States.
Shared Responsibility Payment (Individual)
This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
The Individual Shared Responsibility Payment is the fee for not having Minimum Essential Coverage. The payment for 2015 is $325 per adult and $162.50 per child (up to $975 for a family); or 2% of your household income above the tax return filing threshold for your filing status, whichever is greater. You’ll pay 1/12 of the total fee for each full month a family member went without coverage or an exemption.
This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
An applicable large employer who fails to offer full-time employees minimum essential coverage during a given month will be subject to the penalty if one of their full-time employees enrolls in one of the exchanges in the state and receives a premium tax subsidy. For the year, it’s $2,000 per full-time employee (minus 30 employees). The penalty is per employee even if just one full-time employee enrolls in the exchange and receives a subsidy.
Based on the hours the employee worked in the preceding Standard Measurement Period, this is a "hold" Interval where an employee's full time / part time (FT/PT) status is locked in. This must be between 3 and 12 months and at least as long as the corresponding Measurement Period.
Standard Measurement Period (SMP)
An employer determines each on-going employee’s full-time or part-time status by looking back at the hours worked during the standard measurement period (a defined time period between 3 and 12 consecutive calendar months, as chosen by the employer.)
The employer has the flexibility to determine the months in which the standard measurement period starts and ends, provided that the determination must be made on a uniform and consistent basis for all employees in the same category.
If the employer determines that an employee averaged at least 30 hours per week during the Standard Measurement Period, the employer treats the employee as Full-time for the subsequent Stability Period. Regardless of the employee’s number of hours of service during the Stability Period, the status is retained during the Stability Period.
Tackhammer Penalty
This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
If you offer coverage you may still have a penalty if one of your full-time employees enrolls in the exchange and receives a subsidy. This happens if you offered coverage but it is either unaffordable or doesn’t provide minimum value. For the year it’s $3,000 – but only for those who enrolled in the exchange and received that subsidy. It is a bigger per-incident penalty, but smaller penalty in the aggregate. No tackhammer penalty will be assessed if the minimum essential coverage is offered and it is affordable and provides minimum value—and none of the 5 percent excluded enrolled in the exchange and received a subsidy.
This method calculates affordability of self-only MEC as the annual percentage (currently in 2015 9.5%) of an employee's box 1, W-2 Wages.
Waiting Period
This phrase is not used anywhere in our documentation. It may be useful when researching the regulations for Affordable Care Act.
A waiting period is any period of time that must pass before coverage becomes effective for a new employee or dependent who otherwise meets plan eligibility requirements. The ACA requires an employer to offer an eligible employee coverage that is effective by the 91st calendar day, including weekends and holidays. If an employee takes longer than 90 days to accept the offered coverage, the employer is not in violation of the 90-day limit.
The functions and instructions to enable you to upgrade from an earlier version of this same Passport Business Solutions or RealWorld classic module are included on the PBS disk or download. The EZ Convert Utility provides a fast way to convert multiple companies all in one step.
When using SQL there is also a database in-place upgrade option.