Understanding Maximum Coverage Increase Limits

Many organizations offer life insurance benefit plans and benefit plan options to employees. Employees can normally choose to enroll in one or more of the plans or decline enrollment. Companies often allow employees to enroll in any available insurance benefit plan when they are hired, but limit annual increases after the initial enrollment. To qualify for an exception to the annual increase rule, an organization might require a physical examination.

You can use the Maximum Insurance Coverage Increase program (P085574) to create a coverage increase limit rule. You can create this rule for any of these:

• Benefit plans

• Benefit categories

• Benefit plans within benefit categories

Before creating a new coverage increase limit rule, you need to review the premium and coverage information on the Premium/Coverage tab on the Plan Master form. After reviewing this information, you can select a benefit plan and then use the Allowed Increment option on the Row menu of the Plan Master program (P08320) to access the Maximum Insurance Coverage Increase program. Alternatively, you can select the Categories by Benefit Group program (P08350) and implement the same procedure.

If you create a coverage increase limit rule for a benefit plan, the rule then applies to everyone in the company who is covered by the benefit plan. If you create a rule for a benefit category, then only employees within the benefit category are affected by the rule. If you create a rule for a benefit plan within a benefit category, then only employees within the category who elect the benefit plan are affected by the rule.

The system stores information that you enter in the Maximum Insurance Coverage Increase Amounts table (F085574).