Working with Flexible Credits

This section provides an overview of flexible credits and discusses how to use flexible credits to achieve your Benefits Administration goals.

Page Name

Definition Name

Usage

Benefit Program Table - Plan Type and Option

BEN_PROG_DEFN2

Link plan types to the benefit program and to add important information about plan types.

Benefit Program Table - Cost

BEN_PROG_DEFN3

Link a benefit program and plan type to rate and calculation rules.

You can define three kinds of credits for your employees:

  • General credits that apply to all participants in a benefit program.

  • General plan-based credits that apply to individual plan types.

  • Option-based credits that employees receive because they have chosen a specific benefit plan option.

When you run the Open Enrollment and Event Maintenance processes, the system calculates the value of the credits using the earnings codes that are associated with them. It will sum all the credits by earnings type for each employee, regardless of whether the credits are general credits or option-based credits, and pass the total credits by earnings type to PeopleSoft Payroll. Payroll treats these credits as additional earnings for an employee.

Note: Be aware that you must associate the earnings types that you set up with the earnings program to which an employee belongs before they can be processed by your payroll system.

This section provides examples of how to:

  1. Define credit for employees who enroll in a particular plan type.

  2. Encourage employees to elect employee-only coverage.

  3. Define credits for participants who waive coverage.

  4. Define credit amounts based on employee health coverage.

  5. Set up life or disability plan-based credits according to level of life coverage.

  6. Set up life plan credits based on a flat-monetary amounts.

Example 1: Defining a Credit for All Employees Who Enroll in the Plan Type

Suppose that you want to give all of your employees a general plan-type credit to help offset the cost of coverage, regardless of the benefit plan option within the plan type in which they elect to enroll. Start by adding a new rate schedule to specify the credit amount on the Benefit Rate Table, and enter a G row for the plan type credit.

  1. Access the Benefit Rate Table page.

    Add a new rate schedule for the credit amount.

  2. Access the Benefit Program Table - Plan Type and Option page.

    Enter a G row for the plan type credit.

  3. Access the Benefit Program - Cost page and enter Credit as your cost type and reference the new rate schedule created for plan type general option.

Example 2: Encouraging Employees to Elect Employee-Only Coverage

Suppose that you want to encourage employees to elect employee-only coverage in a medical benefit option. One way to do this is to give your employees an option-based credit equal to the cost of coverage, effectively making the benefit plan employer-paid.

  1. Access the Benefit Program Table - Cost page, insert a new row, and enter Credit as the cost type value.

  2. You must also enter the same rate type and rate table ID that you used for the Price row. The system calculates the credit using the same rates and calculation rules it used for the Price row; therefore, the amount credited is equal to the amount deducted.

Example 3: Defining Credits for Participants Who Waive Coverage

Suppose that you want to give a credit to your employees who waive coverage in any health benefit plan.

  1. Access the Benefit Rates table.

    Define the amount of the credit for waived coverage.

  2. Access the Benefit Program Table - Cost page.

    Insert a row for the waived coverage credit.

  3. Enter Credit as the cost type value on the Benefit Program - Cost page. This is the flexible credit that employees will receive when taking the waive option.

Example 4: Defining Credit Amounts Based on Employee Health Coverage

Suppose that your company offers employee-only medical coverage at a cost of 50 USD per month and family coverage at a cost of 100 USD per month. You want to give all employees, regardless of whether they choose employee-only or family coverage, a credit equal to the cost of employee-only coverage.

Follow the process outlined in example 2. When you set up the option-level flexible credit for the family coverage, use the rate table designed for the employee-only benefit.

Example 5: Setting Up Life or Disability Plan-Based Credits According to Level of Life Coverage

Suppose that you have three life benefit plans: a basic life plan, a one times salary plan, and a two times salary plan. Define option-based credits that will provide the same credit as the one times salary option regardless of the coverage level that the employee chooses.

Use the option type General Credit to set up flexible credits for Life and Disability plan types that provide the same credit no matter which coverage level an employee chooses.

  1. Access the Benefit Program Table - Plan Type and Option page.

    Set up an option type row with a General value. Give it the same deduction code as the other life plans.

  2. Access the Benefit Program Table - Cost page.

    Enter a Credit cost row for the general credit. Give it the same rate type and rate table ID as the one times salary life plan option.

Example 6: Setting Up Life Plan-Based Credits According to Flat-Monetary Amounts

Suppose that you want to define a plan-based credit equivalent to 50,000 USD of coverage regardless of the life coverage level that the employee selects.

  1. Access the Benefit Plan table.

    Define a special 50,000 USD Basic Life Benefit Plan.

  2. Access the Life and AD/D Plan Table page.

    Complete the life plan definition of the 50,000 USD Life Benefit Plan.

  3. Access the Benefit Program Table - Plans and Options page.

    Create a General row for the 50,000 USD Life Benefit plan. Give it the same deduction code as the other benefit plan options.

  4. Access the Benefit Program Table - Cost page.

    Enter Credit as the cost type for the General credit. The Credit cost row should reference the appropriate rate schedule, earnings code, and set of calculation rules.

Example 7: Adding the Benefit Plan and Coverage Code Rates for an Adult Child

Suppose that you want to add an adult child to the employee's benefit plan.

  1. Access the Benefit Rates table page.

    Insert a row for the new coverage code that includes the adult children.

  2. Enter the appropriate Employer and Employee rates on either the Composite Rates or the Detail Rates tab.

    On the Tax Adjustment tab, enter the amount on Tax Adjustment column for the adult child's portion of the premium.

    Note: The amount on the Tax Adjustment column is only a memo rate because it is already included in the total rate. Accordingly, the Total Rate column formula does not include the new column

    When no incremental cost exists for adding coverage for adult children, leave the Tax Adjustment column blank. If the state requires the application of an imputed rate though there is no incremental cost to the employee, you must calculate the amount and enter it in the Tax Adjustment column.

    Separate rate rows are required on the rate table for coverage codes that include adult children and those that do not. You must add a row for Adult Child and enter the rate in the Tax Adjustment column on Benefit Rate Table page.