Defining a Proration Rule for a Fully-Insured Group Policy Plan

Procedure

To define a proration rule for a fully-insured group policy plan:

  1. Ensure that the Proration Rules section is expanded when you are defining or editing a fully-insured group policy plan.

    The Proration Rules section contains the following fields in a grid:

    Field Name Field Description Mandatory (Yes or No)
    Effective Date Used to specify the date from when the proration rule is effective for the policy plan.
    Note:

    The system considers the latest proration rule and not the effective proration rule while prorating the membership premium.

    The effective date cannot be earlier than the plan start date and later than the plan end date.

    		 Yes (Conditional)
    Note: This field is required when you are defining a proration rule for the policy plan.
    Proration Event Type Used to indicate the event when you want to prorate the membership premium. The valid values are:

    • Enrollment - Used when you want to prorate the membership premium on enrolling a member person.

    • Termination - Used when you want to prorate the membership premium on terminating a member person.

    • New Born - Used when you want to prorate the membership premium on enrolling a new born.

    • Same Month Enrollment and Termination - Used when you want to prorate the membership premium on enrolling and terminating a member person in the same month.

    		 Yes (Conditional)
    Note: This field is required when you are defining a proration rule for the policy plan.
    Proration Type Used to indicate how you want to prorate the membership premium. The valid values are:

    • Daily - Used when you want to prorate the membership premium from the day the proration event has occurred.

    • Mid-Month - Used when you want to prorate the membership premium based on the proration date. The system calculates the proration date using the following formula: 

      Bill Period Start Date + Specified Number of Days

      For example, if the bill period start date is 1st of every month and number of days is 15, then the proration date would be 15th of every month. If a member person is enrolled to the membership on or before the proration date, the system will charge the premium for the member person. However, if a member person is enrolled to the membership after the proration date, the system will not charge the premium for the member person. And, if a member person is terminated from the membership on or after the proration date, the system will charge the premium for the member person. However, if a member person is terminated from the membership before the proration date, the system will not charge the premium for the member person.

    • Full Month - Used when the premium for a member person should be charged when the member person is enrolled or terminated on the coverage start date or coverage end date, respectively. If a member person is enrolled or terminated within the coverage period, the system will not charge the premium for the member person.

    		 Yes (Conditional)
    Note: This field is required when you are defining a proration rule for the policy plan.

    • Waiver - Used when the premium for a member person should be waived off completely for the month when the member person is enrolled or terminated from the membership.

    • Coverage Days - Used when you want to prorate the premium for a member person based on the coverage days. If a member person is covered in the membership for a period less than the specified number of days, the system will not charge the premium for the member person. However, if a member person is covered in the membership for a period equal to or more than the specified number of days, the system will charge the premium for the member person.

      Note: You can use this proration type when the proration event is set to Same Month Enrollment and Termination.

    • Enrollment - Used when you want to prorate the premium for a member person using the proration type of the enrollment event.

      Note: You can use this proration type when the proration event is set to Same Month Enrollment and Termination.

    • Termination - Used when you want to prorate the premium for a member person using the proration type of the termination event.

      Note: You can use this proration type only when the proration event is set to Same Month Enrollment and Termination.
    Number of Days Used to specify the number of days to determine the cutoff date. Yes (Conditional)
    Note: This field is required when the proration type is set to Mid-Month or Coverage Days.
  2. Enter the required details in the Proration Rules section.
  3. If you want to define more than one proration rule for the fully-insured group policy plan, click the Add (The Add Icon) icon and then repeat step 2.
    Note: However, if you want to remove a proration rule of the fully-insured group policy plan, click the Delete (The Delete Icon) icon corresponding to the proration rule.
  4. Click Save.
    The proration rules are defined for the fully-insured group policy plan.

Related Topics

For more information on... See...
How to define a plan for a fully-insured group policy Defining a Plan for a Fully-Insured Group Policy
How to edit a plan of a fully-insured group policy Editing a Plan of a Fully-Insured Group Policy