Scenario F
This scenario explains the premium calculations when the group account and the contract period change on different dates within a calculation period.
Member P. Johnson’s is enrolled on a policy within the ORCL PART TIME group account, and the product KINETIC VISION PLAN. Four days after starting a new contract period Johnson switches to the group account ORCL FULL TIME with the product KINETIC BASIC PLAN.
Policy 2344
Policy Code |
POL2344 |
Group Account 1 |
ORCL PART TIME with start date 15-Jan-2014 and end date 14-Jan-2015 |
Group Account 2 |
ORCL FULL TIME with start date 15-Jan-2015 |
Contract Period 1 |
11-Jan-2014 - 10-Jan-2015 |
Contract Period 2 |
11-Jan-2015 - 10-Jan-2016 |
Member |
P. Johnson |
Enrollment Product 1 |
KINETIC VISION PLAN with start date 15-Jan-2014 and end date 14-Jan-2015 |
Enrollment Product 2 |
KINETIC BASIC PLAN with start date 15-Jan-2015 |
The system selects the calculation periods as mentioned in the image below:
First, the system identifies that the input calculation period Jan'15 consists of three calculation period segments:
-
11-Jan-2014 - 10-Jan-2015 / Group Account ORCL PART TIME
As part of this calculation period segment, even though the advance collection setting is 12 Months the system identifies that this is the last calculation period and hence no future calculation periods are selected. This is because the contract period ends in Jan'15 calculation period. -
11-Jan-2015 - 14-Jan-2015 / Group Account ORCL PART TIME
As part of this calculation period segment, even though the advance collection setting is 12 Months the system identifies that this the last calculation period and hence no future calculation periods are selected. This is because the policy enrollment products ends in Jan'15 calculation period. -
11-Jan-2015 - 10-Jan-2016 / Group Account ORCL FULL TIME
As part of this calculation period segment, system sees that the collection setting is 6 and hence the periods beyond Jun'15 are not selected.
All the calculation period segments which belong to calculation periods before Jan'15 are discarded since they do not require recalculation. So only calculation period segments within calculation periods Jan'15 to Jun'15 are considered.
Calculations for KINETIC VISION PLAN Jan'15
For the Kinetic Vision Plan product, the system generates two calculation results since it is part of two contract periods. The image below specifies the configuration that is applicable for the first two segments within the calculation period Jan'15.
Calculation for Contract Period 1 / Group Account ORCL PART TIME / Enrollment Product KINETIC VISION PLAN
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. 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 first day of the contract period. The system considers 365 days for the calendar year because the calendar year (2014) of the reference date has 365 days. The policy enrollment product starts 4 days after the contract period start date, therefore the system calculates the premium for only for 361 days.
The amount distribution setting on the enrollment product is Evenly.
However, the current segment is the last calculation period of the contract period,.Therefor the system uses consolidation calculation to calculate the premium for this calculation period segment:
Daily Amount * #Contracted Enrolled Days - Charged Value.
The Daily Amount is the configured value divided by the number of days in the calendar year of the reference date.
The Contracted Enrolled Days is the number of days enrolled in the current contract period and group account.
The Charged Value is the total premium that has already been charged for the current contract period and group, that is Contract Period 1 / Group Account ORCL PART TIME.
Daily amount = 1400.00/365
#Contracted Enrolled Days = 361
Here, lets consider premium for Jan'14: 1400.00/365*17 = 65.21 and premium for Feb'14 to Dec'14: 116.46. Hence, the Charged Value: 65.21+(116.46*11) = 1346.27.
Premium Amount = (1400.00/365)*361 - 1346.27 = 38.39
Surcharges
The Regional Tax surcharge of 3.25% is applied.
Surcharge Amount for Jan'14 = (1400.00*0.0325)/365*17 = 2.12
Surcharge Amount for each calculation period Feb'14 to Dec'14 = (1400.00*0.0325)/365*(334/11) = 3.79
Surcharge Amount for Jan'15 = (1400.00*0.0325)/365*361 - (2.12 + 3.79*11) = 1.19
Adjustments
In this scenario both enrollment product adjustment rules and group adjustment rules apply. They have the same input amount: the base premium.
Enrollment Product Adjustment
An Office Visit Co-payment Discount is configured for enrollment product KINETIC VISION 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 % on a input amount of 1400.00
Adjustment Amount for Jan'14 = (1400.00*-0.07)/365*17 = -4.56
Adjustment Amount for each calculation period Feb'14 to Dec'14 = (1400.00*-0.07)/365*(334/11) = -8.15
Adjustment Amount for Jan'15 = (1400.00*-0.07)/365*361 - -4.56) + (-8.15*11 = 2.72
Group Account Product Adjustment
A Payment Frequency Discount applies for product KINETIC VISION PLAN in group account ORCL PART TIME. The discount depends on the Advance Collection setting on the policy. The system evaluates the following adjustment rules:
| Payment Frequency | Adjustment | Type |
|---|---|---|
6 |
-1 |
% |
12 |
-1.5 |
% |
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% on an input amount of 1400.00
Adjustment Amount for Jan'14 = (1400.00*-0.015)/365*17 = -0.98
Adjustment Amount for each calculation period Feb'14 to Dec'14 = (1400.00*-0.015)/365*(334/11) = -1.75
Adjustment Amount for Jan'15 = (1400.00*-0.015)/365*361 - -0.98) + (-1.75*11 = -0.54
Surcharge - After Adjustment
The post adjustment Administrative Surcharge of 1.5% applies on the value given by base premium plus adjustments.
Input Amount = 1400-98-21 = 1281.00
Surcharge Amount for Jan'14 = (1281.00*-0.015)/365*17 = -0.89
Surcharge Amount for each calculation period Feb'14 to Dec'14 = (1281.00*-0.015)/365*(334/11) = -1.60
Surcharge Amount for Jan'15 = (1281.00*-0.015)/365*361 - -0.89) + (-1.60*11 = -0.51
Calculation Results for Jan'15 / Contract Period 1 / Group Account ORCL PART TIME
Calculation Result Lines
| Start Date | End Date | Input Amount | % | Prorate Factor | Result Amount | Schedule Definition | Premium Schedule |
|---|---|---|---|---|---|---|---|
01/01/15 |
10/01/15 |
- |
- |
- |
38.39 |
Age Gender Premium |
Kinetic Vision Plan |
01/01/15 |
10/01/15 |
1400.00 |
3.25 |
- |
1.19 |
Regional Tax |
|
01/01/15 |
10/01/15 |
1400.00 |
-7 |
- |
-2.72 |
Office Visit Co-payment Discount |
|
01/01/15 |
10/01/15 |
1400.00 |
-1.5 |
- |
-0.54 |
Payment Frequency Discount |
|
01/01/15 |
10/01/15 |
1281.00 |
1.5 |
- |
0.51 |
Admin. Surcharge |
Calculation Period Segment 2: Contract Period 2 / Account ORCL PART TIME / KINETIC VISION PLAN
Enrollment product premium
This segment is identified as the last calculation period of the contracted period for enrollment product premium since the product ends within the calculation period. The system, therefore, performs reconciliation calculation in this calculation period segment for premium. The amount charged for the calculation period segment is Daily Amount * # Contracted Enrolled Days - Charged Value
Charged Value = 0
Premium Amount = (1400.00/365)*4 - 0 = 15.34
Surcharges
Regional Tax surcharge of 3.25% is applied.
Surcharge Amount for Jan'15 = (1400.00*0.0325)/365*4 - 0 = 0.50
Regional Tax surcharge of 3.25% is applied with an input amount of 1400.00.
Enrollment Product Adjustment
Office Visit Co-payment Discount adjustment = -7% on a input amount of 1400.00
Office Visit Co-payment Discount Adjustment Amount for Jan'15 = (1400.00*-0.07)/365*4 - 0 = -1.07
Group Account Product Adjustment
Payment Frequency Discount adjustment = -1.5%
Payment Frequency Discount Adjustment Amount for Jan'15 =(1400.00*-0.015)/365*4 - 0 = -0.23
Surcharge - After Adjustment
Administrative Surcharge = 1.5%
Input Amount = 1400-98-21 = 1281
Surcharge Amount for Jan'15 = (1281.00*-0.015)/365*4 - 0 = 0.21
Calculation Results for Jan'15 / Contract Period 2 / Account ORCL PART TIME
Calculation Result Lines
| Start Date | End Date | Input Amount | % | Prorate Factor | Result Amount | Schedule Definition | Premium Schedule |
|---|---|---|---|---|---|---|---|
11/01/15 |
14/01/15 |
- |
- |
- |
15.34 |
Age Gender Premium |
Kinetic Vision Plan |
11/01/15 |
14/01/15 |
1400.00 |
3.25 |
- |
0.50 |
Regional Tax |
|
11/01/15 |
14/01/15 |
1400.00 |
-7 |
- |
-1.07 |
Office Visit Co-payment Discount |
|
11/01/15 |
14/01/15 |
1400.00 |
-1.5 |
- |
-0.23 |
Payment Frequency Discount |
|
11/01/15 |
14/01/15 |
1281.00 |
1.5 |
- |
0.21 |
Admin. Surcharge |
Calculation Results for segment Jan'15 / Contract Period 2 / Account ORCL PART TIME
| Policy | Calculation Period | Policy Contract Start Date | Group Account | Total Base Premium | Total Adjustment | Total Surcharge | Total Result |
|---|---|---|---|---|---|---|---|
POL0002343 |
01/01/2015 |
11/01/2015 |
512431 |
15.34 |
-1.30 |
0.71 |
14.75 |
Calculations for KINETIC BASIC PLAN Jan'15
The image below specifies the configuration that is applicable for the last segment within the calculation period Jan'15: Contract Period 2 / Account ORCL FULL TIME / KINETIC BASIC PLAN
Enrollment product premium
The person’s age is still 28 years, therefore the applicable premium value is 1600. This is the value for a calendar year. The system considers 1600.00 as the applicable value for a period of 365 days starting from first day of the contract period. The calendar period is considered to be of 365 days because the calendar year (2015) of the reference date has 365 days but since the policy enrollment product starts after the contract period, policy enrollment product start date is considered hence the premium is calculated only for 361 days.
This segment is identified as a partial enrollment within the calculation period. The amount charged for the calculation period segment is Daily Amount * # Actual Enrolled Days.
Premium Amount = 1600.00/361*17 = 75.35
Surcharges
Regional Tax surcharge of 3.25% is applied.
Surcharge Amount = (1600.00*0.0325)/361*17 = 2.45
Enrollment Product Adjustment
Office Visit Co-payment Discount adjustment = -7% on an input amount of 1600.00
Office Visit Co-payment Discount Adjustment Amount = (1600.00*-0.07)/361*17 = -5.27
Group Account Product Adjustment
Payment Frequency Discount adjustment = -1.5% on an input amount of 1600.00
Payment Frequency Discount Adjustment Amount = (1600.00*-0.015)/361*17 = -1.13
Surcharge - After Adjustment
Administrative Surcharge = 1.5%
Input amount = 1600-112-24 = 1464
Surcharge Amount = (1464*0.015)/361*17 = 1.03
Calculation Results for Jan'15 / Contract Period 2 / Account ORCL FULL TIME
Calculation Result Lines
| Date | End Date | Input Amount | % | Prorate Factor | Result Amount | Schedule Definition | Premium Schedule |
|---|---|---|---|---|---|---|---|
01/15/15 |
15/31/15 |
- |
- |
- |
75.35 |
Age Gender Premium |
Kinetic Basic Plan |
01/15/15 |
15/31/15 |
1600.00 |
3.25 |
- |
2.45 |
Regional Tax |
|
01/15/15 |
15/31/15 |
1600.00 |
-7 |
- |
-5.27 |
Office Visit Co-payment Discount |
|
01/15/15 |
15/31/15 |
1600.00 |
-1.5 |
- |
-1.13 |
Payment Frequency Discount |
|
01/15/15 |
15/31/15 |
1464.00 |
1.5 |
- |
1.03 |
Admin. Surcharge |
Calculation Results
| Policy | Calculation Period | Policy Contract Start Date | Group Account | Total Base Premium | Total Adjustment | Total Surcharge | Total Result |
|---|---|---|---|---|---|---|---|
POL0002343 |
01/01/2015 |
11/01/2015 |
512432 |
75.35 |
-6.4 |
3.48 |
72.43 |
All the calculation periods from Feb'15 to Jun'15 are identified as single calculation period segments hence will have a single calculation result for each of them. The calculation result for Feb'15 will be as shown below:
Calculation Period Segment: Contract Period 2 / Account ORCL FULL TIME / KINETIC BASIC PLAN
Enrollment product premium
This segment is identified as a partial enrollment within the calculation period. The amount charged for the calculation period segment is Daily Amount * # Full Calculation Period Days / # Full Calculation Periods
'# 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 28+31+30+31+30+31+31+30+31+30+31 = 334.
Premium Amount = 1600.00/361*(334/11) = 134.58
Surcharges
Regional Tax surcharge of 3.25% on an input amount of 1600.00
Surcharge Amount = (1600.00*0.0325)/361*(334/11) = 4.37
Enrollment Product Adjustment
Office Visit Co-payment Discount adjustment = -7% on an input amount of 1600.00
Adjustment Amount = (1600.00*-0.07)/361*(334/11) = -9.42
Calculation Results for Feb'15 / Contract Period 2 / Account ORCL FULL TIME
Calculation Result Lines
| Start Date | End Date | Input Amount | % | Prorate Factor | Result Amount | Schedule Definition | Premium Schedule |
|---|---|---|---|---|---|---|---|
01/01/15 |
01/31/15 |
- |
- |
- |
134.58 |
Age Gender Premium |
Kinetic Basic Plan |
01/01/15 |
01/31/15 |
1600.00 |
3.25 |
- |
4.37 |
Regional Tax |
|
01/01/15 |
01/31/15 |
1600.00 |
-7 |
- |
-9.42 |
Office Visit Co-payment Discount |
|
01/01/15 |
01/31/15 |
1600.00 |
-1.5 |
- |
-2.02 |
Payment Frequency Discount |
|
01/01/15 |
01/31/15 |
1464.00 |
1.5 |
- |
1.85 |
Admin. Surcharge |