We previously took part in the Special Enrollment Period (SEP) that many carriers offered, prior to these IRS guideline changes. What do we need to do to handle changes to deductions?
Groups with employees who previously elected are also able to process a Section 125 amendment, which would retroactively apply to employees that enrolled during the SEP.
- By doing so, you will allow your employees who elected to have their deductions converted to pre-tax for those pay periods that were previously processed and thus increase their net pay.
- Employees who previously participated in the SEP offered by benefit carriers will need their deductions adjusted so that pre/ post tax deductions are correct in payroll.
- If any of your employees elected during the SEP, you will need to reach out to the Zenefits Customer Care team to remove these employees from a “Do Not Push” (DNP) deductions list.
- Once Zenefits removes DNP from these employees you should remove the post-tax deductions you manually created for these employees.
Zenefits will provide groups with a census of employees that made elections during the SEP so you can easily identify these employees.
If you are using Zenefits as your payroll provider, we will work with you to process any payroll corrections that are needed, for the retroactive change to your Section 125 agreement.
If you are using a third party payroll provider, please work with them to ensure your employees’ taxability is correct for the respective pay periods.