Benefits: HR- vs Payroll- driven

TOM please review Payroll driven benefits

Summary

Umana manages both HR and payroll. However, in larger companies these are often two different departments, and there are two different ways companies manage benefits.

HR-driven benefits
Payroll-driven benefits

Umana offers both possibilities. You choose by the benefit plan.

See BENEFITS > PLAN: BENEFITS > PAYROLL tab.
Premiums are calculated by the net pay
Checking this option makes the benefit payroll driven.

1. HR-driven benefits

With HR-driven benefits, the coverage and premiums are stored in the BENEFIT record – that's the employee's enrollment record.

Enrollments and premiums can be manually entered, imported, or calculated.

Use these for benefits with premiums that do not vary from one pay period to the next. Typical examples are insurance.

The calculation can refer to information in the employee's dossier (PERS + JOBHIST), but it cannot refer to the employee's earnings during the pay period.

HR-driven benefits and premiums can still change over time. Changes in benefits over time are effectively dated movements in the BENEFIT record.

Whenever the employee's JOBHIST changes, Umana recalculates his HR-driven benefits. If there is a change from the existing stored value, Umana saves it as a new movement in the BENEFIT enrollment. (This is controllable in the benefit plan. You don't need it when you enter benefit premiums manually.)

The payroll calculation engine still has some control over HR driven benefits

It can exonerate the employee for a certain period (change no premium)
It can reduce the premium deducted if the employee has not earned enough to cover it.
It can pay back arrears due from past periods

2. Payroll driven benefits

With Payroll driven benefits the premiums are calculated by Net pay and vary from one pay period to the next (particularly for casual workers) based on the earnings during the period.

The net pay payroll process will (re)calculate each pay run, based on the formulas in the benefit plan. This is a PAYROLL-ORIENTED approach. It is typical for union dues for casual workers.