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Set up third party disability insurance

Third party disability insurance is a type of insurance policy that pays an employee when they take a qualified leave from work. Company contributions are always pre-tax, while the employee deduction can be either pre-tax or post-tax. Check out IRS Publication 15-A to learn more about third party disability insurance.

Part 1: Add the benefit

  1. Navigate to the Benefits tab.
  2. From the "Financial Health" section, select Disability/Leave
  3. Select Yes, we currently offer this benefit then click Next.
  4. Name the benefit, select what type of insurance you have, enter the employee deduction and company contribution, and upload your plan document. 
  5. Click Save & Continue.

Part 2: Add employees to the benefit

  1. Select which employees receive this benefit.
  2. If needed, customize their employee deductions and company contributions.
  3. Click Save & Continue.

Part 3: Upload distribution reports

When your employee takes leave and makes a claim, you'll receive a distribution report that describes the payments they received and any taxes withheld. Depending on your policy, this may need to be included in your payroll.

  • Important: if the policy says you need to include this on your payroll, you'll need to upload the distribution report and then contact us from the Help section of your account so we can make sure it's correctly captured in payroll and reports.

To upload a distribution report:

  1. Navigate to the People tab.
  2. Select the name of the employee who is claiming leave.
  3. Navigate to the employee's benefits.
  4. Select Manage Leaves
  5. Click Add Leave and enter in all relevant info.
  6. Click Edit.
  7. Upload the report.
  8. If the policy says you need to include this in your payroll, contact us from the Help section of your account so we can make sure it's correctly captured in payroll and reports.

Part 4: Annual reporting requirements 

Please visit this Help Center article for more information on annual reporting requirements. 

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