Understanding Benefits Administration

This chapter lists common elements and discusses:

Benefit information automation.
Benefits Administration business processes.

Common Elements Used in This Chapter

Benefit Program	A collection of benefit plans your company offers to a group of employees. For example, you might have one benefit program for hourly employees, another for salaried employees, and a third for executives.
Benefit Plan	Any benefit category, such as health, life, or savings. A benefit plan option is a specific benefit option within a plan type. For example, you might set up three benefit plan options for a plan type: one times salary, two times salary, and three times salary. Benefit plans are associated with benefit programs and can be linked to any number of benefit programs.
Event Maintenance	Process you use to enroll new employees and to track and react to employee benefit changes during the plan year, such as those resulting from a marriage or termination of employment.
Open Enrollment	Process you use to enroll or reenroll participants in appropriate benefit programs and plans during the annual enrollment window or, for federal users, during the open season periods for health benefits, life plans, and savings plans.

Benefit Information Automation

When you implement PeopleSoft Enterprise Benefits Administration, your first area of focus will be your benefit information. Using PeopleSoft terminology, benefit information includes programs, plan types, plans, rates, and calculation rules. All of this information is defined within the Manage Base Benefits business process in PeopleSoft Enterprise Human Resources.

Benefits Administration enables you to link eligibility and event processing rules to your benefit programs, plan types, and benefit plan options.

For benefit plan types, you can set up rates as age-graded, flat, percentage-of-salary, or service-related, depending on your requirements. Calculation rules include as-of dates for age, service, premium and coverage calculations, rounding rules, and minimum and maximum coverage amounts.

For benefit programs, these rules enable the system to automate benefits processing at the program level, meaning that the system can combine employee data with eligibility and event rules to determine whether to create, keep, or terminate employee benefit program assignments. With event maintenance, existing employees will have their benefit eligibility change in response to certain events that ordinarily require a revision of personal benefit information, such as divorce, a transfer in location, or a switch from part-time to full-time employment.

In addition to defining costs for benefit options (through the Manage Base Benefits business process), Benefits Administration enables you to attach your rates and calculation rules to flexible credits. These can include general program-level credits (granted when participating in a benefit program), general plan-level credits (granted when enrolling in any benefit option within the plan type), and option-level credits (granted when an employee elects a specific benefit option).

Use Benefits Administration tables to set up and run your automated benefit system—the event maintenance, open enrollment, and flexible benefits processes that take the hard labor out of benefits information management. After you define event rules, eligibility rules, and flexible credits, you can combine and recombine them with your current benefit information to produce the automated system that best fits the specific needs of your company.

You link eligibility and event processing rules to the benefit programs offered by your organization, thus automating your benefit system at the program level. The system can combine employee data with these rules to determine whether to create, keep, or terminate employee benefit program assignments. In this way, new hires and existing employees can be automatically enrolled, or their elections automatically solicited, both throughout the year and during periods of open enrollment (or for federal users, during benefits open season).

When the time comes to redefine your Benefits Administration system, you won’t have to redefine your entire set of event rules, eligibility rules, and flexible credits. You modify the rules and credits in question with the same page that you used to create them.

It’s possible that two plan types use the same set of event rules in one program and different event rules in another. After you define the two sets of event rules, link the appropriate set of event rules with each benefit program and plan type combination.

Multiple Currency Usage

When you work with multiple currencies for an employee, be aware that Benefits Administration doesn't support the multiple currency conversion required to perform premium calculations. For example, if you pay employees in Swiss CHF and enroll them in a benefit program that uses United States USD, Benefits Administration cannot perform a currency conversion to any base currency. If you don’t use multiple currencies, you can easily process them using Benefits Administration.

Benefit Administration Business Processes

This section discusses:

Open Enrollment and Event Maintenance preparation.
Flexible Spending Account (FSA) Administration.
(CAN) Canadian Flexible Credit allocations.

Open Enrollment and Event Maintenance Preparation

Benefits Administration automates open enrollment and event maintenance processing. Benefits Administration for U.S. Federal Government automates open season and employee benefit changes with the Open Enrollment and Event Maintenance processes.

Eligibility Rules to Determine Benefit Program and Option Eligibility

To prepare for open enrollment and event maintenance, first define the eligibility rules that drive benefit determination. These eligibility rules can be based on job information (such as pay group or department) and geographic location (such as home or work address).

Because you define PeopleSoft table information using an effective date, you can easily define different eligibility rules for each plan year. Associate an effective date with each set of rules and the system will apply the correct rules according to the effective date.

Event Rules Setup to Determine What an Employee Can Choose

While eligibility rules determine what programs and plan options employees are eligible for, you also need event rules and coverage codes to determine what your employees can choose, based on the type of event that has triggered the change in eligibility. For example, when an employee divorces, that act does not enable them to change all of their benefits elections. That's an opportunity most employees should only receive during open enrollment or for federal users, open season. Instead, you will probably want to design the system to enable them to change only their health and life plan enrollments and update their dependent and beneficiary information.

Automated Benefits Program Design

Benefits Administration enables you to create benefit programs using the benefit plans and plan type options that you set up with the Manage Base Benefits business process. After the benefit program framework is defined, you can create eligibility rules, event rules, rates, calculation rules, and flexible credits. Benefits Administration also enables you to set up automated cross-plan validation checking, which you can use to set up prerequisites for plan enrollment.

System Preparation for Benefits Administration

Benefits Administration provides a variety of tools to help you prepare your system for automated benefit processing, from audits to pages that enable you to set up specialized schedules of employees for processing.

Flexible Spending Account (FSA) Administration

Flexible Spending Account Administration is designed for companies located in the United States and Canada. Use FSA Administration to administer healthcare and dependent care FSA claims and to:

Track pledges, process claims, disburse money, print checks, and account for funds according to the amounts employees pledge and the rules for healthcare and dependent care disbursements.
Schedule claims processing based on your operational needs, and view the year-to-date status of employee FSAs.
Use a minimum check option. Selecting this option automatically puts claims below the minimum into a pending file. When the total of pending claims reaches the minimum, the system processes a check for the employee.
Process pending claims. For example, if an employee submits a claim for more than the amount in his or her FSA, you can pay the claim and hold the excess in a pending account.

(CAN) Canadian Flexible Credit Allocations

Under Canadian rules, some common benefit plans have a premium cost tax status under which all employer-paid portions are nontaxable and all employee-paid portions are taxable. With Benefits Administration, you can set up benefit plans that automatically provide the best tax advantage to employees by allocating flexible credits to those benefits that would be taxable unless paid for by credits.