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Basic Life Plan Costing

For this example, a basic life plan is rated by age and costing is calculated based on a costing rule code.

The Calc Benefit Cost by Rule Cd option should be selected where a benefit plan's costs are calculated based on a rule code.

Benefit Costs Code for Basic Life Example

To define the cost for each benefit plan and its various coverage options, usually more than one Benefit Cost Code is required for each benefit plan.

• For a "Basic Life 1.5X coverage," the benefit amount will equal one and a half times the employee’s salary, so the Benefit = Amount Mult x Salary indicator is selected and 1.5 is entered in the Amount Multiple field.

Where the Cost Rule Cd 3, $.01/100 of Mnthly Salary is selected, and the Cost Rule Amount is 2.1900, out of every $100 dollars of an employee’s salary for the month, $2.19 will be used for Cost Rule Amount.

In this example, 75% of the cost is allocated to the employee; therefore the Annual EE Cost field contains 75.0000. Since the other 25% is allocated to the employer, the Annual ER Cost field contains 25.0000.

Calculation of Benefit Cost for Basic Life Plan = (Benefit Amount/$100) x $2.19 x allocation percentage