Reconciling health insurance to payroll liabilities
We are using QB Desktop (Enhanced payroll) for about 170 employees, and have run into an issue with reconciling health benefits to QB liabilities and then making correlating adjustments, if needed. Below are some examples of issues we're having, and hoping to hear any proposed solutions.
Example 1: Company has two health insurance options (PPO and HSA), both of which we offer say $250 per month ($125 per pay period) as a company match; the employee is responsible for the difference depending on single, family, children, spousal, etc. coverages. If the January invoice, which is paid say February 1st (technically late), is for $15,000 for the PPO plan and $20,000 for the HSA plan; but QB shows the following, do we need to adjust payroll liabilities for each affected employee OR "make custom payments" and just enter what we paid for each liability account?:
If QB is saying that $27,500 is the total due, but the invoice (per above) is for $35,000 ($20,000 for HSA and $15,000 for PPO), do we process a "create custom liability payment" for the amounts QB shows then add additional amounts to match what the insurance is saying, thus leaving a credit in the liability accounts; OR, do we go in and manually adjust payroll liabilities for company and/or employee portions to make QB match the insurance bill? Then what about the next month's bill, which surely will have adjustments (hopefully credits since we overpaid in January)?
We're having the same issue on totally voluntary items such as Dental, Life, Disability, etc.
For instance, if Dental Insurance invoice is $5,000 but QB shows we owe $6,000, do we just create custom liability payment for the $5,000 and leave the extra $1,000 showing as a liability at the end of the month; or, go in and adjust payroll liabilities for each affected person regardless of future credits/additions/etc.?
And if we "adjust payroll liabilities" for certain individuals who technically underpaid, will that automatically trigger the next paycheck to have an additional amount to be paid-back in arrears; or, will we need a separate spreadsheet to track those monies until they're satisfied?
Any help is appreciated; i know it's a complicated topic, and we probably are a bit large for QB payroll, but it is what it is. Thanks in advance!
You've come to the right place. I can share some information to get this payroll liability issue sorted out and get you back to business.
QuickBooks will calculate taxes based on the rate that you've set up for a payroll item. In situations like this, I'd suggest running a payroll detail review to review the total withholding taxes. This way you'll be able to determine the taxes for a certain employee that needs to be adjusted.
Once you've verified the difference from your employee's payroll, you can record a payroll liability adjustment to match the amount that was paid from the agency.