Scenario E
This scenario explains the premium calculations in relation with a combination of enrollment product adjustments and group account product adjustments. It is based on a policy with a group account and contract period.
Policy 2343
Policy Code |
POL2343 |
Group Account |
ORCL CORP with start date 1-Jun-2014 |
Contract Period |
1-Jun-2014 - 31-May-2015 |
Member |
P. Johnson |
Enrollment Product |
GOLD PLAN with start date 01-Jan-2015 and end date 15-Apr-2015 |
The system selects the calculation periods as mentioned in the image below.
Here, even though the advance collection setting is 12 Months, the periods beyond May'15 are not selected. This is because the contract period ends in May'15 calculation period. Since the policy enrollment started on 1/1/2015 (so Jan 15 is in fact the first calculation for this policy), there are no past periods that require recalculation, this results in the removal of the past calculation periods. So only periods from Jan'15 to May'15 are considered for calculations.
Calculations for GOLD PLAN Jan'15
The image below specifies the configuration that is applicable for the calculation period Jan'15.
Enrollment Product Premium
The enrollment product premium is based on the person’s age. In this example the person’s age is 28 years, therefore the applicable premium value is 1400.00. This is the value for a calendar year. The system considers 1400.00 as the applicable value for a period of 365 days starting from the first day of the contract period. The calendar period is of 365 days because the calendar year (2014) of the reference date has 365 days.
This amount distribution setting on the enrollment product is Evenly. Thus, the premium value for the calculation period is Daily Amount * # Full Calculation Period Days / # Full Calculation Periods.
Daily Amount is given by configured value divided by the number of days in the calendar year of the reference date.
'# Full Calculation Period Days' is the total number of enrolled days over the calculation periods in which the policy enrollment is full. So, '#Full Calculation Period Days' is 31+28+31 = 90.
'# Full Calculation Periods' is the number of calculation periods in which the policy enrollment is full, so '# Full Calculation Periods' is 3.
Premium Amount = 1400.00/365 *(90/3) =115.07
Surcharges
Regional Tax surcharge of 3.25% is applied.
Surcharge Amount = (1400.00*0.0325)/365 *(90/3) = 3.74
Thus, the surcharge amount of 3.74 is charged.
Adjustments
This scenario includes enrollment product adjustment rules and group adjustment rules. Both adjustment rules use the same input amount.
Enrollment Product Adjustment
An Office Visit Co-payment Discount is configured for enrollment product GOLD PLAN. The Office Visit Co-payment Discount is based on OV Copay parameter based schedule dimension. An OV Co-pay parameter value of 30 is defined on the policy enrollment product in this scenario. Thus the adjustment rule with the dimension value 30 gets selected.
Office Visit Co-payment Discount adjustment = -7%
Adjustment Amount = (1400.00*-0.07)/365*(90/3) = -8.05
Group Account Product Adjustment
A Payment Frequency Discount is configured for product GOLD PLAN in group account ORCL CORP. The Payment Frequency Discount is based on the advance collection setting on the policy. The adjustment rules that get selected for evaluation are
| Payment Freq. | Adjustment | Type |
|---|---|---|
6 |
-1 |
Percentage |
12 |
-1.5 |
Percentage |
By using the dynamic logic condition the rule with the dimension value of 12 gets selected and the adjustment value of -1.5%, gets applied.
Payment Frequency Discount adjustment = -1.5%.
Adjustment Amount = (1400.00*-0.015)/365*(90/3) = -1.73.
Surcharge - After Adjustment
The post adjustment Administrative Surcharge of 1.5% applies on the value given by base premium plus adjustments.
The post adjustment Administrative Surcharge = (1400-98-21)0.015/365(90/3) = 1.58.
Calculation Result Lines for Jan'15
| Start Date | End Date | Input Amount | % | Prorate Factor | Result Amount | Schedule Definition | Premium Schedule |
|---|---|---|---|---|---|---|---|
1-Jan-2015 |
31-Jan-2015 |
- |
- |
- |
115.07 |
Age Gender Premium |
Gold Plan |
1-Jan-2015 |
31-Jan-2015 |
1400.00 |
3.25 |
- |
3.74 |
Regional Tax |
|
1-Jan-2015 |
31-Jan-2015 |
1400.00 |
-7 |
- |
-8.05 |
Office Visit Co-payment Discount |
|
1-Jan-2015 |
31-Jan-2015 |
1400.00 |
-1.5 |
- |
-1.73 |
Payment Frequency Discount |
|
1-Jan-2015 |
31-Jan-2015 |
1281.00 |
1.5 |
- |
1.58 |
Admin. Surcharge |
Calculations for GOLD PLAN April'15
Enrollment Product Premium
The calculation period of April'15 is the last CP of the contracted period for enrollment product premium. The system, therefore, performs reconciliation calculation in this calculation period for premium. The amount charged for April'15 is Daily Amount * # Contracted Enrolled Days - Charged Value
Daily Amount * # Contracted Enrolled Days = 1400.00/365 *(105).
Charged Value = 115.07+115.07+115.07 = 345.21.
Premium for April'15 =1400.00/365 *(105) - 345.21 = 57.53.
Surcharges
Regional Tax surcharge of 3.25% is applied.
Charged Value = 3.74+3.74+3.74 = 11.22
Regional Surcharge for April'15 = (1400.00*0.0325)/365*(105) - 11.22 = 1.87
Adjustments
Surcharge - After Adjustment
Post adjustment administrative surcharge of 1.5% is applied.
Charged Value = 1.58+1.58+1.58 = 4.74
Administrative Surcharge = (1400-98-21)0.015/365(105) - 4.74 = 0.79
Calculation Result Lines for April'15
| Start Date | End Date | Input Amount | % | Prorate Factor | Result Amount | Schedule Definition | Premium Schedule |
|---|---|---|---|---|---|---|---|
01-Apr-2015 |
15-Apr-2015 |
- |
- |
- |
57.53 |
Age Gender Premium |
Gold Plan |
01-Apr-2015 |
15-Apr-2015 |
1400.00 |
3.5 |
- |
1.87 |
Regional Tax |
|
01-Apr-2015 |
15-Apr-2015 |
1400.00 |
-7 |
- |
-4.04 |
Office Visit Co-payment Discount |
|
01-Apr-2015 |
15-Apr-2015 |
1400.00 |
-1.5 |
- |
-0.85 |
Payment Frequency Discount |
|
01-Apr-2015 |
15-Apr-2015 |
1281.00 |
1.5 |
- |
0.79 |
Admin. Surcharge |