Configure ACA - Eligible Earnings for Third-Party Payrolls

ACA-Eligible Earnings for Third-Party Payrolls

ACA-Eligible Earnings for Third-Party Payrolls - Overview

The ACA-Eligible Earnings for Third-Party Payrolls Guide is for employers who are undergoing mid-year UKG Pro activations, employers who need to load new employee payroll data due to a merger or acquisition, or employers who use the UKG Pro People Center solution with a third-party (external) payroll system.

In these cases, payroll data must be imported from a third-party system to include ACA-eligible hours before the ACA Manager can be used to auto-populate Forms 1094-C and 1095-C for ACA reporting.

System administrators must complete the following:

Submit a service request to import data from a third-party (external) payroll system to the UKG Pro solution. As a reminder, the data that is imported must include pay period information.
Note Employers who use third-party payroll providers on an ongoing basis can enable the Third-Party Pay Service API. For more information, refer to the Third Party Pay Data Access in the UKG Pro Solution.
Enable role access to Third Party Pay History data.
View Third-Party Pay History data to confirm that the data has been imported.
Enable role access rights to the ACA-Eligible Third-Party Payroll business rule.
Configure Third-Party earnings codes for ACA-eligible hours of service.

The UKG Pro solution runs two scheduled nightly ACA jobs to track and calculate ACE-eligible hours based on data in the UKG Pro payroll history tables and third-party (external) payroll tables:

ACA Job #1 - tracks average hours worked for employees assigned to a health care measurement group.
ACA Job #2 - tracks the hours worked for all employees for each month.
Important Earnings must be configured for health care eligibility hours to be included in the ACA jobs. For more information, refer to the Designate Earnings for Inclusion in PPACA Calculation.

UKG Pro’s ACA Manager uses the results of these two jobs to auto-populate Forms 1095-C and 1094-C.

Note Based on the Affordable Care Act (ACA), employers must offer health insurance to employees working at least 30 hours per week or 130 hours per month. The ACA-eligible hours of service include the hours worked, and hours for which an employee is paid, but does not work, including vacation pay, sick pay, jury duty pay, and other hours per ACA guidelines.

Enable Role Access to Third Party Pay History Data

To view third-party pay history information in the UKG Pro solution, you must grant the applicable roles access to the Third Party Pay History pages.

Navigation:Menu > System Configuration > Security > Role Administration

From the Role Administration page, select Add.
Add or select the applicable role.
Navigate to the Web Access Rights page.

For each role, enable the View permissions to the applicable Third Party Pay sections and pages.


Role	Navigation
Employee	Myself > Pay > Third Party Pay > Third Party Pay History
Manager	My Team > Third Party Pay > Third Party Pay – Employee List > Third Party Pay History
Employee Admin	Employee Admin > Third Party Pay > Third Party Pay – Employee List > Third Party Pay History

Save your changes.

View Third-Party Pay History Data

After role access has been granted to the Third-Party Pay History pages, in order to view the history date, confirm that the data has been imported.

Based on your role, use the path to navigate to the Third-Party Pay History page.

Role Navigation
Employee Menu > Myself > Pay > Third Party Pay
Manager Menu > My Team > Third Party Pay
Employee Admin Menu > Administration > Employee Admin > Third Party Pay
Confirm that the data has been imported.
If the data has not been imported, employers can complete one of the following based on their UKG Pro implementation phase:
- Pre-Launch Phase: Coordinate with a Launch consultant to load third-party (external) payroll data.
- Post-Live Phase: Import the third-party (external) payroll data by submitting a separate service request.

Role	Navigation
Employee	Menu > Myself > Pay > Third Party Pay
Manager	Menu > My Team > Third Party Pay
Employee Admin	Menu > Administration > Employee Admin > Third Party Pay

Enable Role Access to the ACA-Eligible Third-Party Payroll Business Rule

Before configuring third-party earnings, ensure that the ACA-Eligible Third-Party Payroll business rule access rights are enabled in role-based security for applicable user roles.

Navigation:Menu > System Configuration > Security > Role Administration

From the Role Administration page, at the Find By field, locate and select the role.
From the navigation pane, select Business Rules Access Rights.
At the ACA-Eligible Third-Party Payroll business rule, select the View and Edit boxes to enable role access to the business rule.
Select Save.

Configure Third-Party Earnings Codes for ACA-Eligible Hours

After your system administrator imports payroll data from an external payroll system, the third-party payroll tables are loaded with the earnings and appear on the business rule page. ACA administrators can select which third-party earnings codes to include in ACA-eligible hours of service calculation by configuring the business rule.

Important ACA administrators can exclude payroll opening balances and earning codes from calculated ACA hours by configuring the Exclude Payroll Opening Balances from ACA Hours Calculation setting on the PPACA Reporting Settings page. It is recommended to configure the setting when using the ACA-Eligible Third-Party Earnings business rule. For details, refer to the Configure PPACA Reporting Settings Guide in the UKG Community Library.

Navigation:Menu > System Configuration > Business Rules > ACA-Eligible Third-Party Earnings

From the ACA-Eligible Third-Party Earnings page, review the list and identify ACA-eligible earnings codes.
Note The ACA third-party earnings are marked as Excluded in the Healthcare Eligibility column by default.
Select the applicable earning code(s) boxes, as needed. Include only those earnings codes that use hours in the calculation and comply with ACA-eligible hours of service.
- You can find individual codes quickly by entering the code or description in the Search field.
Select Include. The following message appears: “Third Party Earning Codes updated. ACA hours calculations that use these earning will be updated the following day.” The earning hours associated with selected earnings are included in the ACA eligibility calculations when the scheduled nightly job runs.
Note To exclude previously included earnings codes, select the box again and then select Exclude. Excluding previously eligible codes will remove prior calculation history for reporting years or health care measurement periods that are still in progress.

ACA Eligibility and Measurement Methods

To comply with the Affordable Care Act (ACA), employers can determine an employee’s full-time status by counting each employee’s hours of service using one of two measurement methods.

Full-time status is an average of 30 or more hours of service per week or 130 hours per month:

Monthly Measurement Method
Look-back Measurement Method
Employers may decide to designate additional employees as eligible for coverage or offer coverage on a wider basis than required to avoid an ACA pay or play penalty. For more information, refer to the frequently asked questions on the IRS website.
Note System administrators must configure third-party earnings using the ACA-Eligible Third-Party Payroll business rule to ensure eligible hours of service are included in the health care eligibility calculations.

Monthly Measurement Method

When using the Monthly Measurement method, the hours of an employee, who is not assigned to a health care measurement group, are analyzed on a monthly basis to determine full-time status for each calendar month.

An employee’s earnings hours are tracked from both payroll histories (UKG Pro solution and Third-Party Pay). Assigned earnings codes that are flagged as Health Care Eligible hours are tracked. TheUKG Pro solution calculates hours worked in a month for all employees. Calculations occur nightly.
- Tracks only regular or supplemental payroll with pay period dates in the given month.
- Pro-rates hours for pay periods that are only partially included in the given month.
The hours worked for each employee are updated on the paycheck date when the pay period is processed and closed.
- If an employee works at least 130 hours a month or more, the employee is considered ACA full-time for the given month.

Monthly Measurement Method - Example

In this example, third-party payroll hours were imported for the employee during the launch process and added to the UKG Pro payroll hours, and then measured on a nightly basis. Both UKG Pro and Third-party Earnings were flagged as ACA-eligible hours. At the end of the monthly measurement period for June, a total of 150 hours had accumulated. Since the total hours are above the 130 hour per month threshold, the employee is considered full-time for ACA and their health care eligibility status in UKG Pro was set to Eligible for June.


Go Live Date	Measurement Method	UKG Pro Pay History for June	Third-Party Pay History for June	Total Hours Worked in a Month	ACA Full or Part Time
June 23, 2021	Monthly	40	110	150	Full Time

Look-Back Measurement Method

When using the Look-back Measurement Method, an employer “looks back” to previous hours of service to determine full-time status of a future period for those employees who are assigned to a Health Care Measurement Group.

Note For more information, refer to the Configure and Manage Health Care Measurement Groups.

An employee’s earnings hours are tracked from both payroll histories (UKG Pro solution and Third-Party Pay). Assigned earnings codes are flagged as Health Care Eligible hours. TheUKG Pro solution calculates hours worked in a month for all employees assigned to a Health Care Measurement Group, as of the measurement date. Calculations occur nightly.
- Tracks only regular or supplemental payrolls with pay period dates in the given measurement period.
- Pro-rates the hours for pay periods that are only partially included in the given measurement period
The average hours worked for each employee being measured is updated the day after the paycheck date when a pay period is processed and closed.
Note Managers and employee administrators can review the average hours worked to identify any employees who may be approaching the threshold of 30 hours per week or 130 hours per month (full-time under ACA). The average hours worked are calculated based on the Health Care Eligible Group configuration and duration of the measurement period.
An Eligible status appears, which means the employee is eligible for an Offer of Coverage or a Form 1095-C.

Look-Back Measurement Method - Example

In this example, third-party payroll hours were imported for the employee during the launch process and added to the UKG Pro payroll hours, and then measured for a 12-month period. The Healthcare Measurement Group was configured to define employee eligibility by 30 hours per week. Both UKG Pro and Third-party Earnings were flagged as ACA-eligible hours. At the end of the measurement period (and a day after the final paycheck), a total of 2100 hours had accumulated, which averaged to ~40.27 hours per week (2100 multiplied by 7 divided by 365). Since the average hours are above the minimum 30-hour per week threshold, the employee is considered full-time for ACA and their health care eligibility status in UKG Pro was set to Eligible.


Go Live Date	Measurement Method	Measurement Period	UKG Pro Pay History	Third-Party Pay History	Total Hours at the end of measurement period	Average Hours per Week	Eligibility Status
June 23, 2021	Look-Back	12 months (Jan. 2021 to Dec. 2021)	900	1200	2100	~40.27	Eligible

Run ACA Services Delivered Reports

ACA Services Delivered reports enable employers to view ACA monthly hours and Health Care Measurement Group periods and average hours across both UKG Pro pay history and Third-Party pay history.

Navigation: Team content > UltiPro Sample Reports > Sample Reports > ACA Services Delivered Reports > Employee Total & Average Hours

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