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.

You can use the application to calculate coverage reduction to:

  • Determine the coverage amount.
  • Multiply the coverage amount by the Percent field.
  • Compare the result with the Amount field.

The reduced coverage amount is the greater amount.

  1. Access Coverage Reduction Table (BN02.5).
  2. Select the Company.
  3. Specify this information:
    Start Date

    Specify the start date for the rate table.

    Note: Specify the code and provide a 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 to assign to the rate table. If you leave this field blank, the company currency is the default.

    Beg Age

    Specify the starting age for the range. You can use the application to calculate the ending age for the range. At least one age range is required and the initial range should begin with zero to ensure you include all possible ages.

    Percent

    If you reduced the coverage amount 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, specify 75.

    If you also specify an amount of coverage for this age range, you can use the greater of the two calculations.

    Note: If you do not reduce coverage at lower ages, specify 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, specify 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, specify 10000.

    If you also specify a percent of reduction, you can use the greater of the two calculations.

  4. Click Add.
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