If your company offers Long-Term Disability (LTD) benefits, you'll need to complete a few setup steps to ensure employee contributions and disability payments are handled correctly.
First, your company must establish an LTD plan directly with a third-party insurance provider.
Once the plan is in place, employee LTD contributions can be reflected on pay stubs through manual deductions in US Payroll. This allows the deductions to appear on employee payroll records; however, HiBob does not remit LTD payments to the insurance provider on your company's behalf.
Your company is responsible for sending all LTD payments directly to the LTD provider outside of HiBob.
If an employee receives long-term disability payments and those payments need to be reported on their Form W-2, additional information is required to determine the appropriate payroll and tax treatment.
Please provide the following through a support ticket to ensure HiBob can get the amounts added to your employees YTD:
- A distribution report from the LTD insurance carrier
- Confirmation of who is responsible for paying employee taxes related to the disability payments
- Confirmation of who is responsible for paying employer taxes related to the disability payments
- Confirmation of who is responsible for filing the Form W-2 for the disability payments
This information is required to ensure disability payments are processed and reported correctly for tax purposes.
Important: To help ensure accurate year-end tax reporting and avoid delays in issuing correct Forms W-2, all LTD payment information and distribution reports should be provided before processing your last payroll of the year. Receiving this information in a timely manner allows for proper payroll processing and tax reporting.