Determining the Value of Excess Coverage

From whichever amount is greater from calculations 1 and 2, the application subtracts the amount of after-tax dollars the employee paid for all reportable life insurance benefits.

The result is the employee's reportable amount of excess life insurance for one month.

To determine the value of excess coverage for an employee, the Benefits Administration application performs separate calculations for the employee and the employee's dependents.

To determine the value of an employee's excess coverage, the Benefits Administration application uses the larger result from either of the following two calculations.

Cost factor from group life W-2 table

To determine an employee's excess coverage amount, the Benefits Administration application adds the coverage amounts for reportable life insurance benefits that cover the employee. The application includes all benefits in effect on the parameter date.

From this amount, the application subtracts the excludable amount of life insurance which is defined on the Exclusions: Employee Life field on Group Life W-2 Table (BN00.4).

The result is the employee's amount of excess coverage for the reporting period.

To determine the value of excess life insurance, the Benefits Administration application performs a calculation based on the value selected in the Frequency field on Life Insurance Reportable Income (BN150). This calculation uses two values from Group Life W-2 Table (BN00.4), the amount in the Monthly Cost Per field and the cost associated with the employee's age.
1. If the Frequency field on BN150 is Monthly, the cost of excess life insurance is calculated as follows:
  
  Excess coverage * Cost for employee's age group / Monthly cost per
2. If the Frequency field on BN150 is Annual, the cost will be multiplied by 12:
  
  Excell coverage * 12 * Cost for employee's age group / Monthly cost per
3. If the Frequency field on BN150 is Pay Period, the cost will be multiplied by 12 and divided by the employee's pay frequency:
  
  Excess coverage * 12 * Cost for employee's age group / Monthly cost per pay frequency
  
  The value of excess life insurance is based on the employee's age as of December 31 of the year specified in the As of Date.
Pretax cost
The Benefits Administration application determines the amount of pretax dollars the employee paid for all reportable life insurance benefits as follows:
- The Benefits Administration application adds the pretax contribution for all reportable life insurance benefits, resulting in the annual pretax cost.
- If the Frequency field is Monthly, the annual pretax cost is divided by twelve, resulting in the monthly pretax cost.
- If the Frequency field is Pay Period, the pretax cost is divided by the employee's pay frequency (12, 24, 26 or 52), resulting in the pay period pretax cost.