What is the difference between Deduction Adjustments and Reimbursements?

When an over-deduction occurs, it can be resolved using either a Deduction Adjustment or a one-time Reimbursement, depending on the situation. An example of each type of resolution is seen below:

Cases that can be resolved by a deduction plan

When someone is over-deducted for benefits and has more than a $0 deduction moving forward, we can balance out their year-to-date deductions by calculating an adjustment plan.

  • For example, Bob pays $50 for medical benefits on every paycheck. On 6/1, he attempts to add a dependent to his medical insurance, increasing his deduction to $75. However, on 7 /16 the carrier rejects the addition of that dependent, resulting in a $50 over-deduction. This over-deduction would appear on the Adjustments dashboard, because we can adjust the deductions to $0 for one pay period to balance everything out.
  • In this scenario, Bob's two $75 deductions were made on 6 /15and 6 /30. As a result, we adjust his deductions to $0 on 7 /15, and then restore them to $50 on 7 /31. Bob's deductions are now balanced.

Cases which require reimbursement

In instances where someone is over-deducted for benefits and has a $0 deduction amount moving forward, we cannot balance out their year-to-date deductions with an adjustment plan. They will instead receive a one-time reimbursement.

  • For example, Sally attempts to enroll in medical insurance with an effective date of 6/1 and a per-paycheck deduction of $75, which is approved by the carrier. However, on 7/1, she decides to remain on her spouse's insurance instead, and requests a cancellation as of 6/1. Since Sally had two paycheck deductions of $75 made, this over-deduction would appear on the Reimbursements Dashboard, as a reminder to reimburse.
  • In this scenario, Sally received two deductions of $75 on 6 /15  and 6 /30. Since she has requested a cancellation, we issue a one-time reimbursement of $150 on the next paycheck date of 7 /15  for the two deductions.

Was this article helpful?  

Still need our help? Our support team is waiting to help you. Contact us