If an employee experiences a mid-month coverage change, Dayforce uses 3 payroll election records for the same plan over the course of the year with 3 different per period amounts in Benefits Administration. Because the coverage changes mid-month, Dayforce applies proration to calculate the coverage amount for the month of the change. Example: for a plan year from January 1 to December 31, with a mid-month coverage change on July 19, the calculation results in:
- A payroll election covering all of the pay dates from January to June, with the monthly rate for the old coverage amount.
- A payroll election covering all of the pay dates in July, with the monthly rate for the prorated coverage amount.
- A payroll election covering all of the pay dates from August to December, with the monthly rate for the new coverage amount.
Note: Dayforce doesn't support arrears in earnings for payroll. Payroll administrators are responsible for manually adjusting or quick entries in Payroll > Pay Run Management to account for any difference between previously paid amounts for committed periods in Payroll, and retroactively calculated rates for the months of and after the change in Dayforce.
Example: Imputed Income for Mid-Month Coverage Change
In this example, there is a change to the imputed income calculation because of a mid-month coverage change on July 19, for a plan year from January 1 to December 31. The employee is 57 years old, has 26 pay periods annually, and has the age-based IRS rate of $0.43 applied. The monthly cost is multiplied by the number of months for which there is coverage, divided by the number of pay periods in the employee's pay group calendar for the plan year.
The coverage changes from $150,000 to $200,000 as of July 19, 2016, with the following results:
- Imputed income calculation for a coverage amount of $150,000 for pay dates in January to June:
- (150,000-50,000/1000)*0.43*6/13 = $19.8462 per period
- Imputed income calculation for a prorated coverage amount for pay dates in July:
- [(150,000-50,000/1000)*18/31] + [(200,000-50,000/1000)*13/31] *0.43*1/2 = $26.0081 per period
- Imputed income calculation for a coverage amount of $200,000 for pay dates in August to December:
- (200,000-50,000/1000)*0.43*5/11 = $29.3182 per period
Dayforce generates 3 payroll election records in the Payroll > Payroll Elections screen in People:
|
Effective From |
Effective Until |
Amount Per Pay |
|---|---|---|
| 12/20/2015 | 6/18/2016 | $19.85 |
| 6/19/2016 | 7/16/2016 | $26.01 |
| 7/17/2016 | 12/17/2016 | $29.32 |