Calculating Coverage Reduction

You can reduce coverage amounts by a percent, or to a flat amount based on an employee's age by assigning a coverage reduction table to the benefit plan.

To calculate coverage reduction, the application:

determines the coverage amount
multiplies the coverage amount by the Percent field
compares the result with the Amount field

The reduced coverage amount is the greater amount.

Access Coverage Reduction Table (BN02.5).
Select the Company.
Complete the form using the following guidelines:

Start Date

Type the start date for the rate table.

Note: Type the code and description that represents the coverage reduction table in the Table field. The same rate table can have many start dates to accommodate coverage reduction changes. When you assign a rate table to a benefit plan's coverage record, the rate table's start date must match the start date of the coverage record. If you add a new rate table with a new start date, you must also add a new coverage record.

Currency

Select the currency you want to assign to the rate table. If you leave this field blank, the company currency is the default.

Beg Age

Type the starting age for the range. The application calculates the ending age for the range. At least one age range is required and the initial range should begin with zero to make sure you include all possible ages.

Percent

If you want the coverage amount reduced to a specified percent for plan participants of a particular age, type the percent of coverage used for this age range,

For example, if coverage under an employee life plan reduces to 75% of original coverage when an employee reaches 60 years of age, type 75.

If you also type an amount of coverage for this age range, the application uses the greater of the two calculations.

Note: If you do not want to reduce coverage at lower ages, type 100% instead of zero for lower age range.

Amount

If the coverage amount is reduced to a specified amount for plan participants of a particular age, type the benefit coverage amount used for this age range.

For example, if coverage under an employee life plan reduces to $10,000 for employees 75 years and older, type 10000.

If you also type a percent of reduction, the application uses the greater of the two calculations.
Select the Add function.