Calculating Coverage Amounts

You can define coverage amounts in five ways: a flat amount of coverage, coverage equal to a multiple of salary, coverage equal to a pre-set multiple of salary, a percent of salary, or supplemental.

Flat amount All employees get the same amount of coverage. For example, all employees get $50,000 of coverage, or their spouse/domestic partner and dependents each get $2,000 of coverage.
Multiple of salary Coverage is calculated as a multiple of salary, as the following equation shows:

Annual salary * Multiple of salary = Coverage amount

For example, employees can elect coverage equal to two or three times their salary.

The Benefits Administration application uses the parameters defined on the Salary Parameters subform in Coverage Amounts (BN17.3) to determine the salary used for coverage calculations.
Fixed Multiple of Salary Coverage is calculated according to a pre-set multiple of salary. For example, employees cannot elect coverage that is equal to any multiple of their salary.
Percent Coverage is calculated as a percent of salary, as shown in the equation below:

Annual salary * Percent = Coverage amount

For example, coverage is 60 percent of salary.

The Benefits Administration application uses the parameters defined on the Salary Parameters subform BN17.3 to determine the salary used for coverage calculations.
Supplemental Coverage is elected in specified increments.

For example, if the Increments field is 1000, employees can purchase coverage in increments of $1,000 within the limits defined for the plan.
Custom Calculations User defines a custom calculation if the above options do not meet the needed requirements and places the calculation in the source code. Custom calculations use User Exits functionality. For more information on User Exits, see the Application Development Workbench Standards.

Access Benefit Plan (BN15.1).
Select the company, benefit type, and plan you want to define the coverage amounts.
Select the Inquire form function.
Click the Coverage button. Coverage Amounts (BN17.3) opens and the company, benefit type, and plan fields are filled in.

Note: You may access Coverage Amounts (BN17.3) directly, then select the company, plan type, and plan for which you want to define coverage options.
Define the coverage participants and the coverage start date. Use the following guidelines to enter field values:

Coverage Type

Select the plan participants for this coverage record.

If the plan covers employees, COBRA participants, and retirees, you need at least three separate records, one for each cover type.

Start Date

Type the date this coverage amount record is effective.

You can vary coverage by start date. This allows you to define unique coverage for different periods. If coverage changes, add a new record for the new coverage.

Employee Group

If you define only one coverage option default record for a particular cover type, leave this field blank.

Note: Employees who do not meet the criteria for the employee group(s) on the other coverage record(s) use this coverage. This is only true if there are group-specific records for this plan, cover type, and date, and if you leave this field blank.

If you want to define coverage that is unique to a particular group of employees, select the employee group.

If you are defining coverage for COBRA participants, leave this field blank.

Note: If you define coverage by employee group, make sure employee groups are defined so that an employee can be a member of only one group at a time. If an employee belongs to more than one group for which coverage options have been defined, benefit entry forms and benefit update reports display an error.
Select the calculation type for how you want coverage calculated.

If all employees in a group receive the same amount of coverage, select Flat Amount. For example, all employees receive $50,000 of life insurance coverage, and their spouse/domestic partner and dependents each get $2,000 of coverage.

If coverage is calculated as a multiple of salary, select Multiple of Salary. For example, employees can elect life insurance coverage equal to two or three times their salary.

If coverage is calculated according to a pre-set multiple of salary, select Fixed Multiple Salary. (For example, employees cannot elect coverage equal to any multiple of their salary.)

If coverage is calculated as a percent of salary, select Percent. For example, disability coverage is 60 percent of salary.

If coverage can be elected in specified increments, select Supplemental. For example, increments of $5,000 of life insurance coverage up to $100,000 maximum.

Note: Select if a dependent is disabled on Dependent (HR13.1).
Define dependent coverage using the following guidelines:

Covered

Select whether Spouse, Domestic Partner, Spouse or Partner, Dependents, Partner Deps, Spouse and Deps, Partner and Deps or Spouse or Partner and Deps are covered by the plan.

If Dependents, Partner Dependents, Spouse and Dependents, Partner and Dependents, or Spouse or Partner and Dependents are selected type the age dependents (student or non-student) are no longer eligible for coverage under the plan.

Student Age

If the plan covers dependents, enter the age students are no longer eligible for coverage. If a dependent is defined as a student and not disabled on Dependent (HR13.1), the dependent's coverage is automatically stopped the day before the dependent reaches this age.

If you leave this field blank, 99 defaults.

Dependent Age

If the plan covers dependents, enter the age dependents (who are not students) are no longer eligible for coverage. If a dependent is not defined as a student and not disabled on Dependent (HR13.1), the dependent's coverage is automatically stopped the day before the dependent reaches this age.

If you leave this field blank, 99 defaults.

Part-Time Students

Select whether dependents with a part-time student are eligible for coverage in the plan until they reach the age in the Student Age field. If you select No, dependents with part-time student status are only eligible until they reach the age in the Dependent Age field.

Termination Option

Select whether the dependents stop date is based on the birth date, the last day of the month, or the last day of the year of the maximum age.
Complete the information needed to for calculation using the following guidelines:

Flat Amount

If the plan's calculation type is Flat Amount, type the coverage amount. This amount cannot be overridden on benefit entry forms.

If the plan covers both spouses/domestic partners and dependents, type the spouse/domestic partner coverage amount in the first field and the dependent coverage amount in the second field.

Increments

If the plan's calculation type is supplemental, type the increments of coverage that can be purchased. For example, if employees can purchase coverage in increments of $5000, type 5000.

Multiple

If the plan's calculation type is Multiple (of an employee's salary), type the multiple in which coverage can be purchased. For example, if you type 0.5, valid coverage multiples are 0.5, 1.0, 1.5, and so on.

Optional: You can further define coverage. Defining Coverage Salary Parameters After you select the Add form function, Salary Parameters (BN02.5) opens.

Percent

If the calculation type is Percent (of an employee's salary), type the percent of an employee's salary that is used to calculate the employee's coverage amount. For example, if the coverage amount is based on 60 percent of an employee's salary, type 60.

This amount cannot be overridden on benefit entry forms.

Optional: You can further define coverage. Defining Coverage Salary Parameters After you select the Add form function, Salary Parameters (BN02.5) opens.
Select the Add form function.

If you defined Calculation type as Percent or Multiple of Salary, the Salary Parameters (BN17.5) form opens, you must define the salary parameters for these calculation types. Defining Coverage Salary Parameters