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ACA Compliance Resources

ACA Compliance Resources

Benefits (Deductions)

Configuration > ACA Setup > Benefit

The ACA Compliance Solution recognizes a Benefit as well as a Deduction in the upload of
transactions to determine if an employee has taken health insurance. The system looks for a 2 or a 3
record type and pulls the associated codes into the Benefit Window and appends the codes directly to
an employee. The only Codes you need for the ACA are those that are related to Health (Not Dental or
Optical). The exception will be if you have a W2 Safe Harbor in which case you may need all the

Employee benefits include various types of non-wage compensation provided to employees in addition
to their normal wages or salaries. These costs are incurred by the employer on behalf of the employee.

Keep in mind the difference between a benefit and a deduction:

  • A benefit is paid for by the employer as part of a compensation package.
  • A deduction is a transaction in which an employer collects money from an employee’s pay
    checks. In other words, deductions are amounts taken out of employee wages.

In the ACA Compliance Solution, either a benefit or deduction code that has been checked for health
coverage tracking will be used to monitor employees that had accepted coverage. If you are an
employer who covers 100% of the employee cost for coverage you would typically have only benefit
records. If you require an employee to participate in their individual health costs you would have a
deductions for their portion. In some cases you may have both the benefit record for the employer
portion of the cost and a deduction record for the employee portion of the cost.

Your Benefits/Deductions will appear after a successful Employee and Transaction Import of Data. The
Affordable Care Act Solution only needs Health Benefits/Deductions unless you are using a W2 Safe
Harbor. In that case, you will need deductions as well.

There are two ways to set-up Benefit/ Deduction codes:

  1. Import the benefit/deduction codes through the Transaction Report
  2. Manually add the benefit/deduction codes
The transaction import process (defined later) will actually auto-create benefit/deduction codes
that are found in the import file. In practice you may find that you rarely need to manually enter a
benefit/deduction code apart from the import process.  

Manually Adding Benefit/Deduction Codes

You can manually add benefit/deduction codes by selecting the “Add new benefit” option on the top.

Benefit/Deduction Codes consist of a Code ID and a description as well as the checkboxes defined
below. Users can add, delete and edit benefits*Benefit to Include

Deduction: Please select this check box, if an employee is required to pay a portion of their health care
cost. When setting up these deductions on an individual employee basis, make sure you pay close
attention to the start date. This information is now needed for annual reporting.
Employer Benefit: By selecting this check box, the system will track this benefit on an employee-byemployee basis. Make sure that you input the correct start date, when attaching this benefit to the
employee. Reporting for ACA compliance will rely on that date being accurate.
Type: Please select “Medical” only for those Benefit/Deduction codes that are actually medical related.
If they are not medical, then no check boxes should be selected and they will be ignored when
identifying who had elected coverage.

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