Benefits Enrollment And Termination (565)

1. Benefits Enrollment And Termination (565) SAP Best Practices

2. Purpose This scenario describes the typical process performed by the Human Resources department to enroll employees to the available Benefit Plans and then to discontinue the plans upon departure of the employee. Benefits Employee is enrolled into benefits and retirement savings plans Employee master records are updated, and the payroll deductions are timely and accurate Benefits vendor interfaces can be processed accurately and timely, thus minimizing confusion and employee coverage updates Key process flows covered Benefits Enrollment and Termination Processing Scenario Overview – 1 Purpose and Benefits:

3. Required SAP ECC 6.0 EhP3 Enterprise roles involved in process flows Benefits Administrator Employee Scenario Overview – 2 SAPApplications Required:

4. Benefits Enrollment and Termination Processing Mass Generation of Adjustment Reason Adjustment Reasons is created The adjustment reasons are maintained Benefit Enrollment for New Hires Employee requests for enrollment to the benefits plans General Benefits Information and an Infotype for each enrolled benefit plan is created 401K Enrollment / Participation Mapping Dependents/Beneficiaries to Benefit Plans Check Benefits Maintenance - Participation Monitor Check Benefits Administration - Insurability Scenario Overview – 3 Detailed ProcessDescription:

5. Benefits Enrollment and Termination Processing, cont’d Run Confirmation Statement Termination of Benefit Plans Scenario Overview – 4 Detailed ProcessDescription:

6. Process Flow Diagram Benefits Enrollment and Termination Processing Legend – Please see next page

7. Diagram Connection Legend <Function> Hardcopy / Document External to SAP Financial Actuals Business Activity / Event Budget Planning Unit Process Manual Process Process Reference Existing Version / Data Sub-Process Reference Process Decision System Pass/Fail Decision

8. Appendix – Public Sector Clients • In many cases, various aspects of benefits functionality are outsourced in the public sector. Customized processes need to be tailored for each individual situation. It is important to use benefits consultants with public sector experience to be successful. • Public sector benefits offerings frequently involve public pensions such as CalPERS. Significant governmental regulations apply to these sorts of arrangements including special tax withholding exemptions for covered employees and complex interfaces. Extremely close collaboration between the benefits and payroll consultants is required to be compliant. CAUTION – Fines and penalties frequently apply for late or noncompliant interface filings. • Public pension plans frequently require per period breakdowns for both wages and contributions whenever retroactive pay changes are made. The effort to code such interfaces typically averages 300% over what is required for interfaces that do not require this type of functionality. The ability to develop and code such interfaces is a special skill set that should be a written requirement for project team members.

9. Appendix – Public Sector Clients, cont‘d • Employer contribution rates for public sector savings plans often go out to 3 or 4 decimal places. Standard SAP configuration allows for only 2 decimals, however. Such requirements can be addressed by customizing BADI’s or writing payroll rules as required. • Standard system functionality allows for one type of employer contribution to be generated per plan. In some public sector scenarios, multiple employer contributions are required from the same plan. Such requirements can easily be satisfied using payroll rules INSTEAD of configuring multiple types of plans. • In some public sector environments, employees have the choice of selecting among a large number of vendor-providers for 403(b) plans. (For various reasons, there is no single vendor). In such cases, multiple plans should generally NOT be configured. Instead, please see Note 824473.

10. Appendix – Public Sector Clients, cont‘d • Payment models are typically required for public sector benefits as deductions are often not taken each pay period for each plan. • Confusion often occurs with respect to flexible spending plans for public sector clients because clients often wish to use payment models for deducting them. This approach is contrary to SAP design and is not advised because the SAP process is based upon guidance from the IRS. Similar confusion often results surrounding the use of arrears tracking for FSA deductions. Once again, the standard process is highly advised. • Worker’s Compensation programs are often administered within the Benefits agencies for public sector clients. In many cases, rules that are very different from private sector environments exist which may require special development, configuration and processes. This consideration should be explored during effort estimation for public sector installations.

11. Appendix – Public Sector Clients, cont‘d • Unlike the typical private sector environment, employer costs for benefits must often be split among multiple sources of employee funding in the public sector. Requirements for doing this vary among states and types of employers. For ECC 6.0, the supported SAP approach to delivering this functionality is payroll function XCODI. • Savings bond programs sometimes exist in public sector benefits offerings. Many clients are choosing to discontinue these in light of the significant free functionality now available to all from the U.S. Treasury Department’s website http://www.savingsbonds.gov . In cases where payroll deductions are needed in SAP, infotypes 103 and 104 are preferable to infotype 14. Conversion of these types of deductions requires existing balances even in cases when a payroll go live is on January 1. It is advisable to refund old deductions from the legacy systems and begin taking new ones in SAP to avoid needing to run the ULK9 schema only for this purpose. In addition, the standard ULK9 schema must be modified to accommodate savings bonds.

12. Appendix – Public Sector Clients, cont‘d • In educational environments where employees work only during the academic year but have benefits coverage throughout the entire year, special configuration and effort is required to accommodate the accrual and postings for the supporting deductions. Rules vary by state and location. It is advisable to review this scenario when estimating effort to install. • Employee eligibility within public sector environments tends to vary by plan type in many instances. Eligibility determination can be challenged by temporary periods during which the employee appears to lose eligibility but does not because of special plan provisions that can be based upon union agreements, seniority, or other criteria. Such scenarios should be carefully considered when estimating efforts for these types of installations. • ESS iViews must frequently be enhanced for public sector clients due to special requirements such as manually providing birth certificates before coverage can be extended to new births, adoptions, etc. Many similar examples occur, so the impact of whatever is relevant to a particular installation should be considering during the scoping and estimation process.