This chapter contains the following topics:
To set up the information necessary to administer benefits programs including plans, COBRA, flexible spending accounts, and nondiscrimination testing
Before you can use the Human Resources Benefits Administration system, you must define certain information that the system uses when it processes benefits administration functions.
System setup consists of the following tasks:
Set up benefits administration
Set up COBRA plans
Set up flexible spending accounts
Set up nondiscrimination tests
When you set up the benefits administration information, you define all the benefit plans your company uses. You must also identify any pay types required to pay employees for the benefits, such as vacation pay when employees use the vacation benefit. You must also set up the information that links any of the benefits to specific groups of employees.
COBRA requires that employers who sponsor a group health plan offer employees or ex-employees and their qualified beneficiaries continuation of coverage at group rates that the employee would have otherwise forfeited due to a qualifying event. When you set up COBRA, you define the information the system uses to enroll and maintain individuals in the continuation coverage after a qualifying event.
Flexible spending accounts allow employees to contribute pre-tax dollars into spending accounts, then be reimbursed after submitting claims against the account. You can set up flexible spending accounts for medical and non-medical expenses. When you set up flexible spending account information, you define the plans your company uses and any pay types required to pay employees when they use the flexible plans.
Nondiscrimination tests ensure that highly paid employees do not take a substantially greater advantage of the 401(k) tax deferred benefits than lower-paid employees. When you set up nondiscrimination tests, you define the tests that your company uses.