Calculating coverage amount limits

The Benefits Administration application uses three types of coverage amount limits. You can combine these limits for each plan.

Minimum and maximum coverage amount An employee's coverage cannot be less than the plan's minimum or greater than the plan's maximum coverage limits.

For example, employees must elect between $20,000 and $100,000 of coverage.
Minimum and maximum multiple of salary For multiple of salary plans, the multiple an employee elects cannot be less than the minimum or more than the maximum multiple limit.

For example, employees can elect one to three times their salary.

For other types of coverage, the application calculates the coverage limit as shown here:

Annual salary * Multiple limit = Coverage limit

For example, an employee's coverage amount cannot be greater than two times the employee's salary.
Percentage of another benefit For multiple of salary or supplemental plans, you can limit one plan's coverage to a percentage of another plan's coverage.

For example, coverage in a spouse life plan cannot exceed 75 percent of the employee's coverage in another plan.

Click Limits on Coverage Amounts (BN17.3).

Note: You cannot form transfer to BN17.4. You must click Limits on BN17.3.
Complete the Amount Limits section using these guidelines:

Minimum

If the plan has a minimum coverage amount, then specify the minimum coverage amount.

If the plan is a percent or multiple of salary and the calculated coverage amount is less than the minimum, then the application uses the minimum coverage for an employee.

If the plan is a supplemental plan and the elected amount is less than the minimum, then the application displays an error message.

Leave this field blank for flat amount plans.

Maximum

If the plan has a maximum coverage amount, then specify the maximum coverage amount.

If the plan is a percent or multiple of salary and the calculated coverage amount is greater than the maximum, then the application uses the maximum coverage amount for an employee.

If the plan is a supplemental plan and the employee elects more than the maximum, then the application displays an error message.

Leave this field blank for flat amount plans.
Complete the Multiple of Salary Limits section. Use these guidelines to specify the field values:

Minimum

If the plan has a minimum coverage amount defined as a multiple of salary, then specify the minimum multiple. For example, if the minimum multiple is 1, then specify 1.

Maximum

If the plan has a maximum coverage amount defined as a multiple of salary, then specify the maximum multiple. For example, if the maximum multiple is 5, then specify 5.
Complete the Limit of Another Benefit section using these guidelines:

Percent

If coverage in this benefit plan is based on the coverage of another benefit, specify the percent of coverage that is allowed. For example, if this is a dependent life plan and an employee’s spouse/domestic partner may elect coverage up to 75 percent of the employee’s coverage for an employee life plan, then specify 75.

To add a benefit with this type of limit, the employee must have a benefit in effect for the plan on which coverage is based.

Note: When you base a benefit plan on the coverage of another benefit, the order the benefits are processed is important. You can define the benefit process order.

See What is a Benefit Process Order?.

Benefit Type, Plan

Select the benefit type and plan on which the coverage is based. For example, if coverage under the plan you are defining is based on an employee life plan, then select EL.

Select the benefit plan on which coverage of the plan you are defining is based. For example, if coverage under the plan you are defining is based on an employee life plan, then select the employee life plan.
Complete the Coverage Reduction Rules section using these guidelines:

Rate Table

If the plan specifies a reduction of coverage at different ages, then select a coverage reduction rate table.

The rate table you select must have a start date equal to the start date of this coverage record.

Age Date

If the plan specifies a reduction of coverage at different ages, then select the date on which age of the employee or the employee’s spouse/domestic partner is determined.

Round Method

Select the method of rounding the reduced coverage amount.
Complete the Default Rules section using these guidelines:

Default Coverage

Select whether there is default coverage for the employees covered by this plan.

If you define default coverage, benefit entry forms enroll eligible employees with the default coverage if no coverage is entered; if benefit update reports automatically enroll an employee in the plan, the employee is enrolled with the default coverage.

If the plan offers coverage as a flat amount or percent, then the application calculates the default coverage amount. If the plan offers supplemental coverage or coverage as a multiple of salary, then you indicate the default amount or multiple in the Supplemental Amount or Multiple fields.

If you leave this field blank, then No is set as default. If you do not define default coverage for this plan, then you must specify the coverage amount for all benefits on the benefit entry programs. The benefit update programs will list the plan for an eligible employee but will not enroll the employee in the plan.

Supplemental Amount

If the Default Coverage field is Yes and the plan offers supplemental coverage, then specify the default coverage for employees who do not elect a coverage amount.

Multiple

If the Default Coverage field is Yes and the plan's coverage is a multiple of salary, then specify the multiple that you want to use as default if an employee does not choose a multiple.
Click OK. You will return to Coverage Amounts (BN17.3).
Select the Change form function on Coverage Amounts (BN17.3).