Understanding Plan Option Setup
When the coverage of a plan varies from employee to employee, you can either set up a separate plan for each variation or set up a plan with several options. For example, an organization might offer a dental plan to employees, and the cost for this plan might vary depending on whether employees elect coverage for themselves only or for themselves plus their dependents. There are two ways to set up this dental plan:
Set up separate dental plans called Employee Only, Employee Plus One, and Employee Plus Family, and link each of these plans to the dental category.
Set up a dental plan, such as DEN-01, for an employee and include options such as DEN-01 Plus One and DEN-01 Plus Family.
When you link DEN-01 to the dental category, the system also links the options.
When you set up benefit plan options, you can enter different coverage costs for each option. For example, the Employee Only option might cost 20.00 USD (United States Dollar), the Employee Plus One option 40.00 USD, and the Employee Plus Family option 80.00 USD. You can indicate the cost of an option by:
Assigning it a separate DBA that has an associated amount or rate.
Assigning it the DBA that is associated with the plan.
You can enter an override amount or rate for the option in the Plan Master Rates Window program (P083203).
Using the benefit plan DBA and the benefit plan options DBA.
The DBAs must be separate in this case.
When the employee enrolls in a benefit plan option, the system updates the employee's DBA instructions with the amount or rate that you entered for the option.
When you set up options for a single benefit plan, use the option rule to determine how the system calculates additional coverage costs. You can include one or more of these options in the calculation:
DBA for the benefit plan.
DBA for the option.
Additional amount.
When the employee enrolls in a benefit plan option, the system uses the option rule to either add the additional cost or replace the amount in the DBA that you identified in the Plan Master program (P08320). For example, suppose that the plan DBA identifies the amount that the employee pays for coverage when enrolled in DEN-01 only. If the employee enrolls in DEN-01 Plus One, you can add an amount to deduct for the additional coverage. If the employee enrolls in the DEN-01 Plus Family option, you can set up an even greater amount to deduct for the coverage for an entire family.
You can use one of three option rules for a single plan with options. Depending on the value that you select for the option rule, you can include additional factors that the system uses in the calculation, such as DBAs and additional amounts or rates. When you enter plan options, the system stores the information in the Plan Additional Options table (F083202).
This table illustrates the DBA and additional amounts or rates that are enabled with each rule:
Option Rule |
DBA for Plan ID |
DBA for Option |
Additional Amount |
|---|---|---|---|
1 |
X |
Not Applicable |
X |
2 |
X |
X |
X |
3 |
Not Applicable |
X |
X |
You use the rules for any of the DBA codes that are used for the plan, including the employee payroll deduction and the employer-paid deduction.