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Benefit Cost Code - Adding
Overview
Add a Benefit Costs Code
The Benefit Costs screen can be launched from the Benefit Codes Table.
For the online version of this screen, the fields that display are conditional
based on what is selected on the current record.
For the Enterprise Client version of this screen, the Cost Bands button
is not available. Instead, Cost Band records need to be defined through
the online product.
Benefit Cost Record
Benefit costs are unique by Benefit code, effective dates
(effective and termination dates), coverage code, and benefit profile.
- Active? A
selected Active
checkbox puts the code into service. To remove a cost record from service,
it should have a termination date based on payroll periods. In some cases,
a terminated benefit cost also has its Active
checkbox cleared to take the cost record out of service.
- Code. Select
the benefit code for this benefit cost.
- Description. Enter
a text Description to identify
the benefit cost. Often, the plan year is entered as part of the description.
- Coverage. Select
the Coverage Code to associate coverage with costs.
Coverages may be filtered based on the benefit type for the benefit code
itself. If necessary when editing, re-select the benefit code with a mouse-click,
then select the coverage code.
Look to the upper right section of the screen, under the
cost options and under the Monthly COBRA field.
- Benefit Profile (optional).
If this
benefit cost only applies to a specific benefit profile, select that benefit
profile. Otherwise, leave the benefit profile selection blank. As part
of a benefit setup, the benefit code itself should also be selected in
the benefit profile's New Hire Profile Setup (available
through the Enterprise Client program).
What Type of Annual Costs? Banded?
Increments for Benefit Amounts?
- Option for Cost Type. Choose
the option for the type of cost calculation.
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.
- Benefit Costs are Banded or Custom? (optional).
If this benefit is cost-banded, select the this checkbox and select the
Band/Custom Cd on a subsequent step. Benefit
cost band codes need to be defined through the web product.
- Calculate
Coverage Increments? (optional). Some
cost-banded or custom-programmed costs are defined with one coverage code
that has a range of benefit amounts for coverages. In that case, select
the checkbox for "Calculate Coverage Increments." These types
of plans often offer coverage every 1000, 5000, or 10000 dollars between
the minimum and maximum benefit amounts. Enter the amount for these increments
in the Increments field.
On the online screen, the "Calculate Coverage
Increments" checkbox needs to be selected for the corresponding Increments field to display.
Return to the upper part of the screen.
Effective Dates
- Effective. Enter
the begin date for the benefit costing. When entering this date, consider
the pay period effective dates.
- Termination (optional).
If this
coverage and costing have an expiration date, enter a termination date.
Consider the pay period effective dates.
Deductible, Out of Pocket, and Monthly COBRA
- Deductible and Out of Pocket (optional).
If appropriate
for the benefit, enter the deductible amount in Deductible
Amt, and enter the Out of Pocket maximum for the benefit,
if any.
- Monthly COBRA. Enter
the amount of the monthly COBRA premium to continue this benefit. Leave
this amount blank where the benefit is not COBRA-eligible or where the
COBRA cost is calculated by a formula and is manually entered on the Employee
COBRA Detail.
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
14)
Setup
|
Functionality
|
Common Use
|
14. a) 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.
|
14. b) 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.
|
- Define the value
of the annual benefit amount (optional).
- Benefit Amount (optional). Optionally,
enter the annual benefit amount. For instance, 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. Also refer to the section
of the screen labeled, "Benefit Amount and Salary Calc."
OR
- Benefit Amount by Salary Calculation
(optional). Optionally,
define the calculation for the value of the benefit amountbased
on the rules in the "Benefit Amount and Salary Calc" section.
- To calculate
benefit amounts based on salary multiplied by an amount multiplier and
a cost rule amount, select the Benefit
= Mult x Salary indicator.
- Enter the Amount Multiple.
Benefit Amount= Amount Multiplier
x Employee Salary x Cost Rule Amount
- Select the
Salary Calc Code. When
2, Salary As Of Costing User Date,
is the selected salary calculation code, also complete the User
Date field.
- In the Rounding
Rule field, select the rounding convention to apply to the Benefit
Amount.
OR
- Benefit Amount from Applicable Cost Band (optional).
Optionally, for plans defined with exact benefit amounts for a coverage (instead of using the features to calculate increments), select "Band Max Ben Amt As EE Ben Amt" along with "Costs are Banded or Custom" and a cost band and define the required benefit amount and benefit limit amount as the maximum benefit amount per range of years on the Benefit Cost Band code(s).
Minimums and Maximums
- Define the minimum
and maximum limits for the annual benefit amount values (optional).
- Min Ben Amt. If
a minimum amount of benefit amount applies, enter the minimum benefit
amount. In some cases, this minimum may be necessary.
- Max Ben Amt. If
the plan rules or regulatory guidelines require an annual limit on the
benefit amount, enter the maximum benefit amount. This is common for life
insurances.
Costs in Percentages or Dollars?
- Annual EE CostAnnual
ER Cost and . Define
the annual costs in dollars or 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."
- The benefit has no pre-defined cost for EE or ER (optional).
Deferred
compensation plans and plans with an HSA benefit type typically have the
Annual EE Cost and Annual
ER Cost fields left blank. For other plan types, you may need to
clear the checkbox for updating costs on each Employee Benefit Detail
when the costs differ from the cost setup.
When no Annual EE Annual Cost and/or no Annual
ER Cost is entered, the system tries to read that value as 100.00.
OR
- Calculate Benefit Costs in Dollars (optional). For
benefits costed by dollars, enter the annual amounts associated with this
benefit coverage. Enter the Annual EE
Cost (the cost per year to the employee to have this benefit).
Cost
bands? Cost
bands also can be applied to plans costed in dollars. When cost bands
apply, use the Annual EE Cost
field, and enter the Annual ER Cost
(the cost per year to the employer to provide the benefit to the employee).
Cost bands need to be defined online using a web role such as Payroll
& HR Enterprise. For
a plan with cost bands, coverages can be defined as a range, where the
checkbox for "Calculate Coverage in Increments" is selected.
OR
- Define Costing Percentages (optional). When
"Calc Benefit Cost by Rule Code" is chosen, enter the percentage
of Annual EE Cost (the percentage
of total cost paid by the employee to receive the benefit). For instance,
50% would be entered as 50.
Next, enter the percentage of Annual
ER Cost (the percentage of total cost paid by the employer to provide
the benefit to the employee).
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.
- Minimum
and Maximum Annual Costs or Percentages (optional).
Define
any minimum and maximum costs to the employee or employer.
Minimum Costs?
- Min EE Cost. If
a minimum applies, enter the employee's minimum cost or percentage in
Min EE Cost. Also, if that cost
is predetermined, entering that cost or 0.00 as the minimum often is recommended.
- Min ER Cost. If
a minimum applies, enter the employer's minimum cost or percentage in
Min ER Cost. Also, if that cost
is predetermined, entering 0.00 or that cost often is recommended.
Maximum Costs?
- Max EE Cost. If
a maximum cost applies, enter the employee's maximum cost or percentage
in Max EE Cost. Also, if the cost
is predetermined, entering that cost as the maximum often is recommended.
- Max ER Cost. If
a maximum cost applies, enter the employer's maximum cost or percentage
in Max ER Cost. Also, if the cost
is predetermined, entering that cost as the maximum often is recommended.
Plan Costed by Cost Rules?
- If the plan is
defined by cost rule, complete the following sections.
- By Cost
Rule (optional).
Optionally,
define costs by cost rule. Benefit plan costs calculated
by Cost Rule Code are calculated as a fraction of the salary (or of the
benefit amount) multiplied by the Cost Rule Amount. Confirm that the option
for "Calc Benefit Cost by Rule Code" is selected in the upper
right portion of the screen.
Benefit Cost = Fraction of Cost Rule x Salary or Benefit
Amount x Cost Rule Amount
The Cost
Rule Codes chart indicates which codes calculate a fraction of the
salary.
- Cost Rule Cd. For
benefits calculated by cost rules, select the Cost
Rule Cd.
- Cost Rule Amt. Enter
the exact amount to apply to the selected cost
rule in the Cost Rule Amount
field.
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.
OR
Plan Costed by Cost Bands for Years of Service or Age?
- Rate Costs by Age or Years of Service (optional). When costs are rated by years, this
indicates that cost bands are needed.
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.
- If the benefit
costing is rated by either age or years of service, select the option
for Rated by Age or Rated
by Yrs of Svc.
- Rated
by Age. For
costs rated by the individual's age, click on the Rated
by Age option.
- Rated
by Yrs of Svc. For
costs rated by the employee's number of years of service, click on the
Rated by Yrs of Svc option.
- Age/Svc
Calculation. Select
the way that years are defined in the Age/Svc
Calculation field. If not rated by age or years of service, select
0, Not Age or Service Rated in
the Age/Svc Calculation field
on the Benefit Cost Code. (Refer to information about Benefit
Age/Svc Calc Rules.)
- Where cost
bands rated by age or years of service apply, verify that the "Costs are Banded or Custom" checkbox
is selected, and select the Band/Custom
Cd.Use
a web role, such as Payroll & HR Enterprise to confirm the cost
bands.
- Save.