You’ve successfully completed your annual open enrollment and you receive a carrier invoice. Now what? It’s time to reconcile your invoice to your payroll deductions. This is a critical step and one you should do monthly to ensure employees are enrolled in the correct insurance plans and you are paying premiums for active employees. Reconciling your carrier invoice to your payroll deduction report each month will allow you to correct any issues quickly and easily.

So, where do you start?

First, gather your carrier invoices and a payroll deduction report. A good rule of thumb is to use a payroll deduction report that contains each employee’s name, hire date, coverage type, employer cost and employee cost (by payroll frequency).

Next, compare the payroll deduction report to the carrier bill. Depending on how your cost share is established, the total amount listed on the carrier invoice for the employee should match the total of the employer cost plus employee cost on your payroll deduction report.

Note: if the coverage is 100% employer paid, there will be no deduction for the employee. Conversely, if it is a voluntary plan where the employee pays 100% of the premium, the amount on the carrier invoice should match the payroll deduction for the employee listed.

Something doesn’t match?  Here’s a few possible scenarios and suggestions:

  • Scenario #1: An employee name is listed on the payroll deduction report but the employee is not listed on the carrier invoice.
    • Notify your employee benefit consulting firm to confirm if the employee was properly enrolled with the carrier;
  • Scenario #2: An employee name is listed on the carrier invoice but the employee is not listed on the payroll deduction report.
    • Is this a terminated employee? If the termination is recent, this could have a simple explanation: the termination request to the carrier was not processed before the invoice was generated or distributed.
    • Either way, notify your employee benefit consulting firm to ensure the termination has been processed. Be sure to check this with the next month’s reconciliation to avoid overpaying premiums. It’s much easier to correct these types of errors early. Some carriers have limitations on how far back they will credit overpayment of premiums.
  • Scenario #3: The premium payment due on the insurance carrier’s invoice doesn’t match the employee deduction on your payroll deduction report.
    • Double check that you have deducted the appropriate amount from each employee, especially with voluntary plans. The bills typically come as a list bill and you will want to reconcile each employee versus just paying the total listed on the bill.
  • Scenario #4: Your carrier invoice matches to your payroll deduction report – fist bump – you did great!  That means payroll deductions and enrollments for that carrier are good to go.
    • Remember to reconcile each month as you may have employees that have experienced a qualifying life event or a change in employment status.

Contact your acumen advisor or account manager with any questions on reconciling your invoices.

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