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SOP for Reconciling Annual Group Benefit Premiums for PEO Clients

Purpose:

An annual reconciliation should take place in December of each year once the final statement has been issued by the benefits provider (typically at the end of November). The purpose of the reconciliation is to ensure the annual group benefits statement aligns with the year-to-date totals on the payroll for the given tax year. Should there be any variance between the benefits statement and the year-to-date totals, an adjustment can be included with the final payroll of the current year.

Procedure:

Request the group benefits annual statement in excel format by submitting a ticket to HR. HR will provide the annual statement to Payroll once available.

The annual statement will include the premiums for all PEO clients/employees. Create a new file for each PEO client by filtering the annual statement by client or employee and copy and pasting the data into a new excel file.

Save the new file in each client’s Payroll Reporting>Year>PPE folder. 

Generate the Group Benefit Report to pull the year-to-date totals.
  • Navigate to System Reports>Payroll Exports.
  • From the file export list, select Group Benefit Report.
  • Select the client’s Payroll Reporting>Year>PPE folder.
  • Select all payrolls for the current tax year.
  • Click Create Export File in Excel Format.

Sample Group Benefit Report:

Prepare a worksheet to reconcile the annual statement to the year-to-date totals from the group benefits report.

Example Reconciliation:

The benefits balance would be the adjusting entry to be added to the final payroll.

The adjusting entries can be imported or manually entered into the deduction/benefits tab in transaction entry when processing the payroll.

Once the adjusting entries have been added, and payroll has been calculated, compare the year-to-date totals from the payroll register to your worksheet. The totals should match the totals from the annual benefits statement.

Example annual statement review:

Ensure the Variance totals result in 0.00 before proceeding with finalizing the payroll.

Conclusion:

By following and understanding this SOP, users will be able to accomplish performing annual reconciliations, ensure the correct premiums are recorded on the annual return slips, as well as verifying PSII has collected the correct amount from the client for the cost recovery.