Benefit Cost Codes Table

Overview

Benefit Cost Code for Family Medical Coverage

Benefit Cost Codes Table

Add a Benefit Costs Code

The Benefit Costs screen can be launched from the Benefit Codes Table.

For more information, refer to: Benefit Cost Code - Adding.

Benefit Cost Record

Benefit costs are unique by Benefit code, effective dates (effective and termination dates), coverage code, and benefit profile.

Effective Dates

Look to the upper right section of the screen, under the cost options and under the Monthly COBRA field.

What Type of Annual Costs? Banded? Increments for Benefit Amounts?

Cost Type Options

Option

Functionality

Common Use

Calc Benefit Cost in Dollars

Cost is calculated (A) based on dollar amounts entered in the Annual EE Cost and Annual ER Cost fields or (B) is based on dollar amounts entered for cost bands.

Often, medical plan and dental plan costing is in dollars.

Calc Benefit Cost in Percent

Costing is calculated based on percentages. The following fields are interpreted as percentages when this option is selected: Annual EE Cost, Annual ER Cost,  Min EE Cost, Min ER Cost, Max EE Cost, and Max ER Cost fields.

Some deferred compensation plans have a coverage that needs to be costed as a percentage.

Calc Benefit Cost by Rule Code

Costing is calculated according to cost rule for salary or benefit amount. Costs will be allocated according to percentages entered in the Annual EE Cost and Annual ER Cost fields.  Cost banding can be activated and applied.

Often, life insurance costing is by rule code.

Look midway down the screen, and see if benefit costs are banded or custom.

On the online screen, the "Calculate Coverage Increments" checkbox needs to be selected for the corresponding Increments field to display.

Deductible, Out of Pocket, and Monthly COBRA

Benefit Profile

Costs in Percentages or Dollars?

When "Calc Benefit Cost by Rule Code" is chosen, enter the percentage in Annual EE Cost (the percentage of total cost paid by the employee to receive the benefit) and the percentage of the Annual Employer Cost. For instance, 50% would be entered as 50.  Avoid under or over allocating for a benefit calculated as a percent: the Annual EE Cost plus the Annual ER Annual Cost should have a sum equal to 100 when these values are percentages.

When the values for EE Amount and the ER Amount are considered percentages versus when are these dollars depends on the selected costing option. Review these selections before defining the costs. For dollars, the option is "Calc Benefit Cost in Dollars." For percentages, the option is "Calc Benefit Cost by Rule Code."

Minimum Costs?
Maximum Costs?

Annual Benefit Amounts

A benefit amount is not a cost. The benefit amount can be considered how much an insurance might pay under particular situations. For instance a 50,000 in life insurance coverage would be expected to have a benefit amount of 50000 in the system.

Methods to Define an Annual Benefit Amount (Step 13)

Setup

Functionality

Common Use

Benefit Amount

Enter the plan coverage's benefit amount in the Benefit Amount field if it is a preset value.  

This defines a preset Benefit Amount for the benefit plan and coverage code.

If this benefit coverage pays a standard amount per occurrence, enter that amount here.

For instance, if a company offered $15,000 of group life insurance coverage, 15000 would be entered in the Benefit Amount field for that benefit coverage.

Benefit Amount by Salary Calculation

Select the "Benefit = Mult x Salary" checkbox.

Enter the Amount Multiple.

Select the Salary Calc Code.

Select the Rounding Rule.

To calculate benefit amounts based on salary multiplied by an amount multiplier and a cost rule amount.

Some AD & D plans are calculated based on salary divided by a cost rule and  multiplied by a rate factor.

Benefit Amount= Amount Multiplier x EmployeeSalary x Cost Rule Amount

Minimums and Maximums

Benefit Costing Section: Plan Costed by Cost Bands for Years of Service or Age?

Benefit Cost = Cost bands rated by age or years of service

 If the costs are not rated by age or years of service, you can opt to leave "Rated by Age" selected and choose 0, Not Age or Service Rated, in the next field for Age/Svc Calculation.

Benefit Costing Section: Plan Costed by Cost Rules?

Benefit Cost = Fraction of Cost Rule x Salary or Benefit Amount x Cost Rule Amount

When a cost rule amount is used in benefit calculations, it is a multiplier.

For instance, a cost rule amount of 2 with cost rule 4, $0.01/10 of Weekly Salary, would equal $0.02/10 of weekly salary, which is the weekly salary multiplied by 0.002. In this instance, if the weekly salary was $500.00, then the benefit cost would be $1.00. The benefit cost would then be distributed according to the percentages in the Annual EE Cost and Annual ER Cost fields.

When the benefit cost setup applies a cost rule, yet no cost rule amount is available, then the system will try to interpret a blank (empty) cost rule amount field as a 1.00, but it is clearer to enter 1.00 in that case.