1. Benefits Implementation Guide
  2. Calculating COBRA Plan Premium Amounts for Benefit Plans with Options

Calculating COBRA Plan Premium Amounts for Benefit Plans with Options

The calculations for benefit plans with options are similar to the calculations for benefit plans without options. However, a plan with options also uses the option rule fields in the Plan Master Options program (P083202). COBRA plan premiums for benefit plans with options are calculated in one of these three ways:

  1. If a DBA appears in the EE Payroll Deduction field on the Plan Master form, or a DBA appears in the Payroll Ded DBA field on the Plan Master Options form, you can place the cursor in the field and select Plan Rates from the Row menu.

    On the Plan Master Rates Window form, complete the Type field with a C (COBRA), and then complete the Amount and Date fields in the detail area. The system calculates the COBRA plan premium amount based on the value in the Payroll Ded - Option Rule (payroll deduction - option rule) field and whether the COBRA amount is set up.

    For example, if the option rule is 1, the system searches for a COBRA amount that is set up for the plan in the EE Payroll Deduction field. If the option rule is 3, the system searches for a COBRA amount that is set up for the option in the Payroll Ded DBA (payroll deduction DBA) field. If the option rule is 2, the systems looks for a COBRA amount for either field. If a COBRA amount is found, the system sums up the amounts for the DBA fields.

    Note: If the option rule is 2, and a COBRA amount is set up for only one of the DBAs, the system adds that COBRA amount to the regular benefit DBA calculations of the other DBA.

  2. If the system does not find a COBRA amount for the EE Payroll Deduction field or the Payroll Ded DBA field as described previously, the system searches for COBRA amounts on the other DBAs.

    Note: Option rules are important for calculating the COBRA amount. Based on the option rules and the corresponding DBA fields, valid COBRA amounts are summed. If no COBRA amount is found for a particular field and a particular option rule, the system does not use the field in the calculation.

  3. If no COBRA amounts are found for any of the DBA fields, the system sums the regular benefit DBA calculation for each set of DBAs.