Level Funding Pricing

Level funding is a type of self-funding. It offers all benefits of traditional self-funding. However, it provides one additional benefit which helps to stabilize monthly costs of the self-funded employer to pay off the claim, ancillary, claim based fee, enrollment based fee, and discount charges.

Oracle Revenue Management and Billing enables you to process and bill the funds charges to the self-funded employer in either of the following ways:

• Pay the fixed flat amount in every bill period

• Pay the amount based on the enrollment based limit in every bill period

The system enables you to define whether the price items included in the claim, retention type claim based, retention type enrollment based, ancillary, and discount pricing rule types are eligible for level funding. If the price items are eligible for level funding, you can then include them in the level funding pricing rule type indicating that the charges for these price items will not be included in the respective billable charge (for example, claim billable charge), but it would be settled against the funds billable charge. While adjusting such charges against the funds billable charge, there might be some surplus or deficit in funds at the time of settlement which is ideally at the end of year. In such case, the system enables you configure whether a flat amount or percentage of surplus should be retained by the ASO provider or whether a flat amount or percentage of deficit is offered as a discount to the self-funded employer.

The pricing for the level funding can be defined using the level funding pricing rules. You can define a level funding pricing rule at the parent customer and bill group levels. The level funding pricing rule at the bill group level takes precedence over the level funding pricing rule at the parent customer level. You can define the level funding pricing rules for parent customers and bill groups from the Customer 360° Information screen. You can define a level funding pricing rule using a level funding pricing rule type. It is the level funding pricing rule type which helps the system to determine:

• Business object using which the level funding pricing rule should be created in the system.

  Note: You must not select the Primary option while defining a level funding pricing rule type.

• Algorithm which should be triggered for deriving the account and price item while creating the funds transaction legs.

  Note: You must create an algorithm using the C1_​ACCPRISL algorithm type and attach it to the Account and Price Item Derivation system event.

• Pricing rule post-processing algorithm which should be triggered once the effective level funding pricing rule is derived.

  Note: A pricing rule post-processing algorithm type is not shipped with the product. You can create a custom algorithm type, if required.

• Additional generic information, such as:

  • Whether the funds charge should be written off when the bill is generated in the post runout period of the policy. In this case, a write-off adjustment is created against the respective bill segment during the post bill completion. The write-off adjustment is created using the post runout write-off adjustment type which is specified in the level funding pricing rule type.

  • Transaction field which you want to use in the rules as the output parameter to determine whether the price item should be considered for billing.

  • Value which the output parameter in the rule should return when the price item in the level funding pricing rule type should be considered for processing.

• Price items for which you can define level funding pricing rules using the level funding pricing rule type.

• Rate options that you can use while defining the pricing for the level funded price items.

• Different type of account to which a price item should be billed based on the specified priority.

• Rule type which indicates the rules that should be executed to determine whether the price item is eligible for billing.

• Additional level funding specific information, such as:

  • Whether the level funding premium (i.e. funds) should be calculated using the bill period based recurring flat fee pricing rule or using the retention type enrollment based pricing rule.

  • Bill period based recurring flat fee pricing rule type or retention type enrollment based pricing rule type which you want to use for calculating the level funded premium.

  • Price item whose pricing you want to use for calculating the level-funded premium.

  • LF billable charge line type using which you want to create billable charges for level funded premium.

  • GL only contract type which indicates the contract against which the claim, ancillary, claim based fees, enrollment based fees, and discount charges that are settled against the funds must be debited. The distribution code on the GL only contract type will indicate the GL account against which charges settled against the funds must be debited.

  • Liability distribution code will indicate the GL account against which charges settled against the funds must be credited.

  • Number of days before which you want to create a To Do for reminding the self-funded employer to renew the level funded agreement.

  • Surplus billable charge line type using which you want to create the billable charge when the surplus funds are left with the ASO provider at the time of settlement.

  • Deficit billable charge line type using which you want to create the billable charge when the funds are in deficit at the time of settlement.

  • Domestic provider billable charge line type using which you want to create billable charges for the claim, claim based fees, enrollment based fees, ancillary, and discount charges which are settled against the funds for a domestic provider.

  • Markup or markdown billable charge line type using which you want to create billable charges for markup or markdown which are settled against the funds.

  • Rule type which indicates the rules that should be executed to determine whether the markup or markdown calculation line is eligible for billing.

  • Transaction field which you want to use in the rules as the output parameter to determine whether the markup or markdown calculation line is eligible for billing.

  • Rule type which indicates the rules that should be executed to determine whether the level funded premium is for a domestic provider.

  • Transaction field which you want to use in the rules as the output parameter to determine whether the level funded premium is for a domestic provider.

Once a level funding pricing rule type is defined, you can create level funding pricing rules using the level funding pricing rule type. While defining a level funding pricing rule for a parent customer, you need to specify the following:

• Price item for which you want to define the pricing.

• Specific stop-loss pricing rule of the parent customer whose accumulation parameters you want to inherit for the level funding. On selecting a specific stop-loss pricing rule, the level funding pricing date range is set automatically. The level funding pricing date range is same as the specific stop-loss pricing rule.

• Rate option which you want to use while defining the level funding pricing.

• Settlement frequency which helps to determine the bill after date. The valid values are:

  • Immediately - If you select this option from the list, the bill after date is not calculated. The funds billable charge is billed immediately in the next bill cycle.

  • Manually (At Required Intervals) - If you select this option from the list, the bill after date which is specified in the Manual Settlement Bill After Date parameter while executing the C1-BCLF batch is stamped on the funds billable charge.

  • Never - If you select this option from the list, the bill after date which is specified in the Manual Settlement Bill After Date parameter while executing the C1-BCLF batch is stamped on the funds billable charge.

  • Yearly - If you select this option from the list, the bill after date is set to the pricing end date in the funds billable charge.

  • On Settlement - If you select this option from the list, the bill after date is set to the settlement date in the funds billable charge.

  Note: The accumulation parameters, such as incurred start date, incurred end date, paid start date, paid end date, and settlement days are automatically inherited from the parent customer's specific stop-loss pricing rule. You cannot change any accumulation parameter except the settlement days.

• Settlement days which helps to calculate the settlement date (which is pricing end date, incurred end date, or paid end date whichever is later + the settlement days)

• Whether the customer would like to renew or cancel the level funded agreement.

• Whether a flat amount or percentage of surplus should be retained by the ASO provider at the time of settlement.

• Whether a flat amount or percentage of deficit should be offered as discount to the self-funded employer at the time of settlement.

However, while defining a level funding pricing rule for a bill group, you need to specify the following:

• The policy status in which the level funding pricing rule is applicable.

• Price item for which you want to define the pricing.

• Parent customer's level funding pricing rule from which you want to inherit the accumulation parameters.

  Note:

  The pricing date range is derived from the parent customer's level funding pricing rule because the level funding pricing rules for parent customer and bill group should have the same date range.

  The settlement fund price item is derived from the level funding pricing rule type using which the level funding pricing rule is created.

• Rate option which you want to use while defining the level funding pricing.

• Price items whose charges should be accumulated against the level funded price items so that it can be settled against the funds.

• Whether the line items and markup or markdown in a particular claim pricing rule should be accumulated.

  OR

  Whether the line items which are associated with the Level Funded pricing rule type category should be accumulated.

• Whether the charges created using the billable charge line types in a particular ancillary pricing rule should be accumulated.

  OR

  Whether the charges created using the billable charge line types where the Pricing Rule Type Category characteristic is set to Ancillary should be accumulated.

• Whether the discount calculated using a particular discount arrangement pricing rule should be accumulated.

• Whether the charges calculated using the retention type claim based or retention type enrollment based pricing for a price item should be accumulated.

You can also specify a pricing group while defining a level funding pricing rule for a bill group. Once a level funding pricing rule is defined for a bill group, the system creates a price assignment in a price list and assigns the price list to the bill group.

The following new batches are introduced in this release:

• C1-ACLF - This batch is used to accumulate the charges which are to be settled against the funds. During the accumulation post-processing, the level funded billable charges (which are created through the TFM process) are posted against the GL accounts which are derived using the GL only contract type and liability distribution code information in the level funding pricing rule type. For more information about the batch, refer to Oracle Revenue Management and Billing Batch Guide.

• C1-BCLF - Once the level funded billable charges are accumulated, this batch is used to create the accumulated level funded billable charges. It is also used to calculate the bill after date. For more information about the batch, refer to Oracle Revenue Management and Billing Batch Guide.

Related Topics

Parent Topic: Self-Funded Pricing