Active Employee Showing as Terminated — Eligibility File Correction Process

[Itsamario]

 

A participant is still actively employed but the recordkeeper shows a termination date from approximately two years ago. The participant says the date corresponds to moving from part-time to full-time, not an actual termination.

The plan’s call-center instructions direct the participant to his manager rather than the plan. The manager does not know how to correct the record. The recordkeeper’s service team says the plan must submit a new file before the participant can establish deferrals.

For those familiar with payroll/recordkeeper administration:

1. What record would typically correct this—a rehire transaction, employment-status correction, or full eligibility-file update?
2. Which sponsor-side function usually owns it: payroll, HRIS, benefits, or the TPA?
3. Is this normally corrected through the next regular feed or through an ad hoc correction file?
4. Are there controls that identify active employees coded as terminated, or are these usually found only when the employee tries to enroll?
5. What is the normal escalation path when the employee’s manager cannot identify the appropriate benefits or payroll contact?

I am trying to better understand the upstream administrative process because my role generally sees only the participant-facing result.

[WCC]

16 hours ago, Itsamario said:

What record would typically correct this—a rehire transaction, employment-status correction, or full eligibility-file update?

Not a rehire transaction since the participant is not a rehire. The plan administrator should be able to call the recordkeeper and explain the situation. Depending on the recordkeeper they will ask for either an email with instructions or ask that a service request be submitted through the recordkeeper website by an authorized plan contact. If the employer is managing the change from part-time to full-time with a term date and a rehire date - that is a problem.

16 hours ago, Itsamario said:

Which sponsor-side function usually owns it: payroll, HRIS, benefits, or the TPA?

Depends on the size of the company. In a "small" company sometimes the same person runs payroll, HRIS and benefits. In a "big" company, there is usually separation of these functions and this change would generally lie with HRIS or benefits. 

16 hours ago, Itsamario said:

Is this normally corrected through the next regular feed or through an ad hoc correction file?

I have seen this type of error corrected both ways, but generally more often in an ad hoc correction. 

16 hours ago, Itsamario said:

Are there controls that identify active employees coded as terminated, or are these usually found only when the employee tries to enroll?

The plan administrator would have to implement the controls, the recordkeeper is not going to do that. Employers can obtain demographic reports from the recordkeeper and compare those to their payroll / HRIS records. 

16 hours ago, Itsamario said:

What is the normal escalation path when the employee’s manager cannot identify the appropriate benefits or payroll contact?

Consider changing the process at the recordkeeper so the recordkeeper escalates issues to someone at the company who can answer questions. Consider taking the managers out of the middle if they have no authority to make changes or provide answers. If the managers are the first line of escalation, the employer should provide direction to the managers of how to handle escalated issues. 

Lastly, you may want to consider (1) the missed deferral opportunity rules if the employee has been excluded for the last two years and unable to enroll (2) any non-discrimination testing / reporting impacts due to an incorrect status code.