How Coverages Are Calculated
Calculate coverages by applying a calculation method to values you define and values that participants enter during enrollment.
Settings That Affect Coverage Calculations
The following determination rules are available for computing coverages:
Calculation Method |
Description |
---|---|
Flat amount |
Flat amount is predefined or entered during enrollment. |
Flat range |
Flat amount must be within a predefined range. Any change in the coverage value of insurance plans is treated as a change in coverage. For example, if you have coverage of $100000 and if it changes to $500000, it will be treated as new coverage. Although, it’s the same plan-option that you may enroll in. |
Flat amount plus multiple of compensation |
Calculates coverage as flat amount plus multiple of compensation . |
Flat amount plus multiple of compensation range |
Calculates coverage as flat amount plus multiple of compensation within a predefined range. |
Multiple of compensation |
Calculates coverage as multiple of compensation. |
Multiple of compensation plus flat range |
Calculates coverage as multiple of compensation plus flat amount that's within a predefined range. |
Multiple of compensation range |
Multiple of compensation must be within a predefined range. |
No standard value used |
Uses coverage defined in variable coverage profiles. |
Same as annualized elected activity rate |
Uses annualized elected activity rate for coverage amount. |
Post enrollment calculation formula |
Calculates coverage based on election information entered during enrollment using a formula you define. |
The calculation method you select works with other settings to compute the final coverage.
Condition |
Related Configuration |
---|---|
Calculation methods using multiples |
Specify the operation, such as simple multiplication, percentage, per hundred, and per thousand. |
Calculations based on compensation |
Specify the compensation derived factor that defines the basis for the compensation calculation. |
Rounding |
Select a rounding rule. |
Limits |
Define high and low limits. |
If you enable participant entry during enrollment |
You can set valid ranges and default values. The default values are used if you recalculate coverages and no user entry is available. |
Variable coverage |
Attach variable coverage profiles to the base coverage. |
How Coverages Are Calculated
The calculation method and other settings defined for a coverage determine when and how it's calculated.
For example, the coverage may be calculated prior to enrollment, upon enrollment, or after enrollment has been completed.
Example: Multiple of Compensation
Inputs to Calculation |
Calculated Rate |
Calculation Details |
---|---|---|
Multiplier: 2 Operator: Multiply by Compensation Amount: 25,000 (value derived by applying a Compensation Factor of Annual Salary) |
50,000 |
2 * 25,000 |
Example: Multiple of Compensation Range
Inputs to Calculation |
Calculated Coverage |
Calculation Details |
---|---|---|
Minimum: 2 Maximum: 6 Increment Amount: 2 Default Value: 4 Operator: Multiply by Compensation Amount: 25,000 (value derived by applying a Compensation Factor of Annual Salary) |
100,000 (using default) |
4 * 25,000 |
Example: Flat Amount Plus Multiple of Compensation
Inputs to Calculation |
Calculated Coverage |
Calculation Details |
---|---|---|
Flat Amount: 50,000 Multiplier: 2 Operator: Multiply by Compensation Amount: 25,000 (value derived by applying a Compensation Factor of Annual Salary) |
100,000 |
50,000 + (2 *25,000) |
Example: Flat Amount Plus Multiple of Compensation Range
Inputs to Calculation |
Calculated Coverage |
Calculation Details |
---|---|---|
Flat Amount: 50,000 Minimum: 2 Maximum: 6 Increment Amount: 2 Default Value: 4 Operator: Multiply by Compensation Amount: 25,000 (value derived by applying a Compensation Factor of Annual Salary) |
150,000 (using default) |
50,000 + (4 *25,000) |
Example: Multiple of Compensation Plus Flat Range
Inputs to Calculation |
Calculated Coverage |
Calculation Details |
---|---|---|
Minimum: 30,000 Maximum: 50,000 Default Value: 40,000 Increment Amount: 10,000 Multiplier: 2 Operator: Multiply by Compensation Amount: 50,000 (value derived by applying a Compensation Factor of Annual Salary) |
140,000 (using default) |
40,000 + (2 *50,000) |