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Benefit Cost Bands

TABLE NAME: VAL_BENCOSTALTBANDCODES

Details

Benefit Cost Bands define advanced rate definitions for benefit costs based on years of age or service, minimum and maximum benefit amounts, gender, tobacco use status, and/or zip code. Some or all of these criteria may apply to a particular plan. These records are called cost bands because the rows in rate tables from insurers look like horizontal bands.

If a benefit's costs do not vary based on years, gender, tobacco use, or zip code, then cost bands may be unnecessary. However, having any of those variations indicates that cost bands may be needed.

On a Benefit Cost Code, a checkbox indicates that the plan's costs are banded or custom. That checkbox for "Costs are Banded or Custom" controls the display of the field for "Band/Custom Cd" and whether the Cost Bands button displays on the online Benefit Cost Codes table. To see the "Band/Custom Cd" field and the Cost Bands button online, login online through a web role such as Payroll & HR Enterprise. Open the Benefit Code, and then the Benefit Cost Code.  On the Benefit cost code, to display the button for Cost Bands, select the checkbox for "Band/Custom Cd".  The Cost Band button and access to benefit Cost Band Code records is only available online. Setup or verification of Cost Band setup is unavailable through Enterprise Client or Mangrove PODS Administrator.

Several setup tables and employee-level records facilitate cost banding. To include cost bands in cost calculations, on the Benefit Cost record, the checkbox for "Costs are Banded or Custom" needs to be selected and the Cost Band code for the intended Cost Band record(s) needs to be selected. For gender codes, the setup of gender codes is standardized. Tobacco use codes are standardized to a set of 3 numeric options. Cost bands based on age or years of service rely on the corresponding setup on employee records. Employee age is based on the birthday on the Demographics tab and how the age calculation is defined on the Benefit Cost record. Spouse age relies on the setup of an Employee Contact Detail with the spouse's birthday and a relationship code that is set to be for a spouse and on the existence of an online Employee Beneficiary/Dependents Detail for the spouse and the plan.

Benefit Cost Bands Table

Define Cost Bands

Setup or verification of Cost Band records is online only. The screen to define valid cost bands is unavailable through Enterprise Client or Mangrove PODS Administrator.

1. Log into a web role with access to benefit setup tables, such as Payroll & HR Enterprise.
2. From the Validation Tables, open the Benefit Codes Table, and click on the button for "Benefit Cost Codes."
3. On the Benefit Cost Codes table, navigate to the record that you want to view cost bands for. For a plan with bands:

• Verify that either the option is selected to Calc Benefit Cost in Dollars or to Calc Benefit Cost by Rule Code.
• Verify that the checkbox for "Costs are Banded or Custom" is selected. This checkbox needs to be selected to display the "Band/Custom Cd" field and Cost Bands button (online only).
• In the Band/Custom Cd field, select the cost band if the band already exists.

4. To open the Cost Band Codes Table, click on the Cost Bands button. If this button is not available, select the checkbox for "Costs are Banded or Custom" first.
5. Code (required).  Enter a code of ten characters or less with no spaces or special characters.  For Cost Band Codes, if there are different tables needed based on gender, tobacco use status, or zip code, define multiple records with the same Code value. This differs from the setup of many tables, which normally require a unique value by code. One Cost Band Code can be selected per Benefit Cost Code record, but all Cost Band records with the same Code value can be used by benefit processing for that record. This enables more options for the setup.
6. Description (required).  Enter a description of thirty characters or less for the cost band. When more than one Cost Band record exists with the same code, consider adding Multi to the description.  Some cost bands have a description with the letters CNVB and a date in the description, which often indicates that a cost band record was first defined before the structure of cost bands was updated in 2010. Those descriptions can be modified to better summarize the purpose of the record.
7. Active?  An active code has the Active checkbox selected, making the code available and keeping the code in effect as a valid choice. Where more than one Cost Band record has the same code, the Cost Band Code may remain selectable if code records with the same name remain active.

Cost Filters

8. Define Cost Filters as needed. Each cost band can be filtered to apply to only employees with the following demographic factors. By defining multiple Cost Band Codes, different cost tables can be defined to apply to these criteria. If you complete any cost filters, the setup may need additional Cost Band records. For instance, if a set of costs applies to males, a set of costs would typically be needed for females, and there may need to be another set of costs for any other gender designation found in the system.

• Tobacco Use.  To define a cost band by tobacco use, select a tobacco use code in the Tobacco field. When this isn't relevant, select code 3, Tobacco Use Not Applicable.
• Gender.  To define a cost band by gender, select a gender in the Gender field. When gender is not applicable to the cost, leave the Gender selection blank on this record.  The gender of an employee is defined on the Demographics tab. When there is a cost band for one gender, typically a cost band with the same code is defined for the other gender code(s) in the system.
• Zip.  When zip code isn't relevant to the cost setup, leave the Zip field blank. To define cost bands that vary geographically by zip code, enter each affected zip codes in the Zip field, or define zip codes by range. The band applies to zip codes equal to or greater than the zip code entered. The zip code from an employee's primary mailing address on the Employee Master is used as the zip code for benefit cost bands.

Cost Rules

9. Define the Cost Rules section as needed.

• Banded?  For costs with cost bands, select the "Banded" option.
• Custom?  The "Custom" option is reserved for use in setups that have custom-defined cost algorithms outside the standard system setup. Unless instructed to do so after a custom program is built, avoid selecting the Custom option.
• Multiple of Benefit Amt?  When a Cost Band definition sets costs that are multiples of the benefit amount (such as a life insurance amount), then select the checkbox for "Multiple of Benefit Amt" and be sure that costs are defined in the non-fixed columns. This selection can result in significantly overstated benefit costs if this checkbox is selected and if the benefit cost is not a multiple of the benefit amount.
• Payroll Function.  When plans have custom-defined cost algorithms, then the a value for the payroll function may be provided by the developer of the algorithm.
• Enrollment Function.  When plans have custom-defined cost algorithms or custom-defined algorithms for benefit assignment based on other selections in the employee self service benefit enrollment, then the a value for the enrollment function may be provided by the developer of the algorithm.

Cost Bands

10. Save.  When a cost band is first added, the record needs to be saved before rows of bands can be defined.
11. Each cost band has the fields for years, associated costs, and any benefit amount limit for filtering whether the cost band applies. Use the small icons to add, edit, and delete these banding records as needed. When you add or edit, a separate screen opens up to enable defining the values. Since these are ranges, these do need to be listed in order from the lowest number of years (as low as 0 in some cases) to the greatest number of years (often 99 and sometimes 150).

Individual bands defined on a Cost Band record apply to years equal to or greater than the number of years entered. The Benefit Cost Code defines what years are used and how those years are calculated.

12. Click on Edit to edit a row, or click on Add to define a new row. Enter cost banding information for the first band. Enter the demographic factors, associated costs and any benefit amount limit for the cost band:

1. Min Yrs.  Per band, define the minimum number of years. Often, the first band starts with a minimum of 0 or 1.
2. Max Yrs.  Per band, define the maximum number of years. The maximum per band is found in the cost banding tables provided by the benefit carrier or benefits broker.  
3. Fixed EE $.  The employee's fixed annual cost for the benefit according to the defined criteria. This helps define the employee's cost. Omit this value and leave it blank if an EE $ is defined.
4. Fixed ER $.  The employer's fixed annual cost for the benefit according to the defined criteria. This helps define the employer's cost. Omit this value and leave it blank if an ER $ is defined.
5. EE $.  The employee's annual cost for the benefit according to the defined criteria. This helps define the employee's cost.  This can be a fixed cost or a value that will be multiplied by the benefit amount.
6. ER $.  The employer's annual cost for the benefit according to the defined criteria. This helps define the employer's cost. This can be a fixed cost or a value that will be multiplied by the benefit amount.
7. Min Ben Amt.  Enter any corresponding minimum benefit amount for the benefit according to the defined criteria, especially the range of benefit amounts is defined per band instead of on the Benefit Cost code records. This acts to filter out the applicability of this cost band based on the employee's benefit amount for the associated plan.

Note: Instead of just limiting the Benefit Amount for the cost band, entering the minimum and maximum benefit amount can be used to filter out the applicability of this cost band to Employee Benefit Detail's with Benefit Amounts outside of the range.

8. Max Ben Amt.  Enter any corresponding maximum benefit amount for the benefit according to the defined criteria, especially if the range of benefit amounts is defined per band instead of on the Benefit Cost code records. This acts to filter out the applicability of this cost band based on the employee's benefit amount for the associated plan. For the setup of employee self-service benefit enrollments, this can also cap the benefit amount assigned through the self-service benefit enrollment process.

13. Edit the banding information until it defines the next band, and then continue to the next row. To add additional bands, complete step 10 for the following row, and repeat until all of the cost bands for the selected benefit and selected coverage are entered and verified as accurate.
14. Save.

If necessary, return to the relevant Benefit Cost Code record, and select the Cost Band code.

Benefit Cost Band Codes Table