SAP HR Benefits

Somshankar De somshankar.des@wipro.com 24th & 25th April, 2008

Confidentiality
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Agenda
Introduction to SAP HR Benefits Benefits Hierarchy Benefit Plans Benefits Business Processes Enrollment Benefits Administration COBRA Benefits Infotypes Integration with Payroll Benefits Interfaces and Extensions Reports Q&A
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Introduction to SAP HR Benefits

Benefits are perks provided to the employees by the employer. These perks are in addition to the salary or wages which the employees are getting. The primary reason for providing such incentives is to foster employee satisfaction. A very good example of benefits would be a Health Plan. When a person joins the organization for the first time, the person is enrolled in a particular Health Plan. As far as the premium for the plan is concerned, the monthly contribution from the employer would be greater than the monthly contribution from the employee. As a result both the employee and the employer are satisfied.

Why Benefits?

Just think for a moment.

Human Resource forms a very important resource in major organizations today. No longer is HR secondary to other resources.
In order to retain the right people for the right job, organizations have to provide incentives in addition to the salaries or wages that they might be paying. Organizations achieve this by providing various benefits to the employees.

If employees are provided with the right benefits they are happy. And a happy employee works harder than a disgruntled employee.

Benefits Module in SAP HR

The diagram below shows the major components of the Benefits module in SAP HR.

Master Data

Administrative tools

Benefits BENEFITS

Report

Employee self service

Benefits Module in SAP HR - contd

Administrative tools This encompasses functions which are needed to handle an organization's benefits administration processes, from enrollment of employees to eligibility monitoring. Reports Various reports are there that allows one to summarize and analyze data relating to benefits. Master Data - In the SAP System, the information units used to enter master data are called infotypes. Special infotypes are used for benefits administration. Employee Self Service - A range of self-services are available that enable the employees of the organization to view and change their benefits data within the company Intranet or the Internet.

What are the main processes?

The following are the key processes or activities that can be performed by the Benefits Administration module in SAP HR: Enroll employees in benefits plans. Monitor continuing eligibility for plans Monitor provision of evidence of insurability

View information about current benefit enrollments

Print enrollment and confirmation forms Transfer data electronically to plan providers Administer retirement plans Terminate enrollments

Benefits Hierarchy
The Benefits hierarchy in SAP consists of three structures: Benefit area - Benefit areas are required to have separate administration of different benefit plans.

First program grouping - First program groupings are a means of identifying groups of employees with common characteristics who are eligible for certain plans.

Second program grouping - Second program groupings are further subdivisions within the first program groupings.

Benefits Hierarchy
1st Programming Grouping 2nd Programming Grouping

Benefit Plans
A plan category is a predefined classification of the various benefit plans according to characteristics. In various plan categories are as follows: Health plan - Health plans are broadly divided into Medical plans and Dental plans. Insurance plan There might be several types of insurance plans namely ADCH,
ADEE, ADSP or LTD.

Savings plan Also known as SIP or Savings and Investment plans. Savings plans are
again divided into SIP regular and SIP catch up.

Flexible Spending accounts These are also known as Reimbursement Accounts.

They are of two types namely HCRA and DCRA.*

Miscellaneous plan Here the plans which can not be defined in above four types of plans, can be defined here.

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Health Plans

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Insurance Plans

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Savings Plans

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Flexible Spending Account

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Credit Plans

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Miscellaneous Plans

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Benefits Business Processes

A single Benefits life cycle consists of the following processes or activities: New Hire - New hired employees are expected to select a plan within few days of
joining, failing which certain default plans will be assigned to them as an interim measure.

Open Enrollment - This process refers to enrollment of employees in plans for the
coming season.

Life Event Changes - Sometimes an employee may be required to make certain

changes to his/her benefit plans in some period other than the open enrollment period.

Enrollment Confirmation - Once employees have enrolled in one or more plans

during the open enrollment period, confirmation forms need to be printed and sent to the employees.

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Enrollment
Enrollment is a function that enables to enroll employees and, where possible, make changes to employee benefit elections. Open enrollment more specifically refers to enrollment of employees during an open enrollment period in plans for the coming season. An open enrollment period is a period of time during which an organization allows its employees to enroll in new benefits plans or change existing benefits elections. The benefits offer set up for open enrollment is valid only during the open enrollment period.

Open enrollment period begins

Open enrollment period ends

Employee having new/modified plans Employee having existing plans Employee chooses new plans or makes changes to existing plans

How open enrollment works?

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Open Enrollment Contd..

The open enrollment process has the following features: Annually employees are given option to elect a particular plan type.

Active employees use Employee Direct Access to enroll instead of using the legacy system or Benefits Call Center.

Once open enrollment period closes changes to the existing plans are not permitted unless an allowed life event change occurs for the employee.

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Benefit Infotypes in Enrollment

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What happens During the Enrollment Process?

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Life Event Changes

Sometimes an employee may be required to make certain changes to his/her benefit plans in some period other than the open enrollment period. This happens when the employee undergoes a major life event change. One such example could be that the employee gets married. This type of enrollment is called adjustment. In SAP terminology a life event change is also called an adjustment reason.

Employee gets married a life event change occurs

Adjustment takes place to existing plans

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Participation Monitor
During enrollment processing, the system offers only those plans for enrollment for which employees are eligible. Participation Monitor ensures that the employee plan elections are consistent with the setup of plans and flexible administration settings in Customizing.

It detects employees who are no longer eligible for plans in which they are participating and find any inconsistencies in plan elections.

Plan details input to participation monitor

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Benefits Administration
In addition to the SAP HR Processes already discussed, there are other certain other processes. Form Printing. Monitoring evidence of insurability. Retirement Plans Administration. Transferring Data to Provider Service Calculation
Participation service Benefit accrual service Vesting service - Adjusted Employment Date - Vesting Service

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Benefit Administration

Enrollment (HRBEN0001) Termination (HRBEN0014) Participation Monitor (HRBEN0003) Participation Overview (HRBEN0006) Evidence of Insurability Monitor (HRBEN0004) Participation Overview (HRBEN0006) Form Printing (HRBEN0005) Generating Mass Adjustment Reasons (HRBEN00ADJRSN) Dynamic Eligibility Check (HRBEN0047) Creating a Payment List (HRBEN00PAYRQ) Transfer of Data to Providers (HRBEN0052) FSA Admin (HRBENus02) FSA Claims Monitor (HRBENUSFSACLM)

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COBRA*
The COBRA is a federal law that allows eligible employees and/or dependents who are losing their health or dental benefits to continue coverage in certain circumstances where coverage might otherwise end.
Qualifying Events for Employees. Qualifying Events for Dependents.

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COBRA* qualifying event system

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Benefits Infotypes
The following infotypes are used in SAP HR Benefits. The standard infotypes are given below:
Infotype 0171 0006 0021 0376 0378 0167 0168 0169 0170 0377 0211* 0212* 0270* 0375 Standard / Custom Infotype Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Standard Description General Benefits Information Addresses Family Member/Dependents Benefits Medical Data Adjustment Reasons Health Plans Insurance Plans Savings Plans Flexible Spending Accounts Miscellaneous Plans COBRA Qualified Beneficiary COBRA Health Plans COBRA Payments HCE Information
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Benefits Integration with Payroll

Due to the nature of different types of benefits in the US, benefits bring a unique perspective to payroll deductions. The payroll schemas and rules provide the processing engine to benefits. Output of the payroll-benefits process payroll results, which are integrated with SAP Financials. Benefit deduction wage types are written to the payroll results tables (RT and CRT). Postings are carried out to GL as well as Accounts Payable (AP). Actual money is remitted by AP to vendors. Interface read payroll and benefits data to send data files to vendors. Benefits Plan Data

FI Posting

Employee Infotype Data Vendor Data For providers

Payroll Processing Schema/ Rule

Payroll Results

Interface with vendors

3rd party (AP) processing

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Contd

Integration between the SAP Benefits module and the Payroll system enables benefit deductions and contributions to be processed by the SAP payroll each time it runs. The main function here is to determine the wage types relevant for the processing of benefits plans in payroll. These wage types can be divided into two categories: I. Pre-tax Pre-tax wage types store employee contributions, which are deducted prior to taxation. II. Post-tax - Post-tax wage types store employee contributions, which are deducted after taxation.

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Benefits Interfaces
Any number of interfaces can be configured for the purpose of data transfer to and from external providers and the SAP system. Thus these interfaces may be inbound or outbound.

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Reports
Eligible Employees (Report RPLBEN01) Participation (Report RPLBEN02) Changes in Benefits Elections (Report RPLBEN07) Changes in Eligibility (Report RPLBEN09) Changes in Default Values for General Benefits Info (Report RPLBEN13) Health Plan Costs (Report RPLBEN03) Insurance Plan Costs (Report RPLBEN04) Savings Plan Contributions (Report RPLBEN05) Flexible Spending Account Contributions (Report RPLBEN08) Stock Purchase Plan Contributions (Report RPLBEN16) Costs/Contributions for Miscellaneous Plans (Report RPLBEN15) Vesting Percentages (Report RPLBEN06) Contribution Limit Check (Report RPLBEN18) Employee Demographics (Report RPLBEN11) Benefit Election Analysis (Report RPLBEN17) Enrollment Statistics (Report RPLBEN19)
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Thank you

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