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)