Policy Based Premium

Premium schedules that are based on a schedule definition of type Policy Based Premium are calculated only once per policy, instead of once per member.

Only the members that have a time valid product that uses the same premium schedule are considered when deriving the premium tier. E.g. if the premium tier specifies that it applies if there are 'at least 2 members' then in order for the tier to apply there need to be at least two distinct policy enrollments that have a link to a policy enrollment product that is active on the reference date that have a link to the subject tiered premium schedule.

This means that it is allowed for two members on the same policy to have different enrollment products and still count towards the same tier; as long as the products use the same premium schedule those members are considered for the same tier. It is also possible for a member to have one product that is calculated per member per product and another product that is calculated per policy per product.

Note that when a 'per policy' calculation is applied, then all the adjustment rules and surcharge rules are also applied per policy. The set of rules that is applied is determined by the policy enrollment product that is used as the context for the 'per policy' calculation, i.e., the policy enrollment product for the person that is also the policyholder or - if the policyholder is not insured - the oldest insured member.

The selected tier is valid for the complete period for which the premium calculation is done, there is no pro-ration.

For an example of the configuration of a tiered premium schedule, please refer to Premium Schedules.

Tier Determination

The system determines which tier applies to the policy based on the policy enrollments in the current period. Please refer to Premium Tiers for more information on the mapping of policy enrollments to premium tiers.

There are two ways the system can determine whether a policy enrollment counts towards the tier in a period:

Reference Date

The application determines the policy’s tier based on the reference date. It is often the first date of the calendar month. The tier is determined by every policy enrollment with an active policy enrollment product for a tiered product on the reference date.

For tier determination, the application always uses the calculation period's reference date; it will not use the reference date on the policy contract period.

Split Period

This method is applied when the Partial Period Resolution on the enrollment product is set to Split Period. For all other Partial Period Resolution settings, tier determination is done on reference date.

The Enrolled Days Threshold, defined on the enrollment product, determines which day in the period is used to decide whether a policy enrollment counts towards the tier in that period.

• Members that were added to the policy after the Enrolled Days Threshold, do not count towards that month’s tier determination.

• Members that were termed on the policy on or before the Enrolled Days Threshold, do not count towards that months tier determination.

Example

The following example shows a simple configuration and tier determination of a Split Period tier determination method.

For this example we assume that the enrollment product is defined with a "Partial Period Resolution" of Split Period and an "Enrolled Days Threshold" of 15.

The following premium tiers are defined in the system:

Table 1. Example

Tier	Subscriber	Spouse	Dependent
Single	1	0	0
Single + 1	1	1	0
Family	1	1	> 0

Table 2. New Enrollment

Current Enrollment	Current Tier	New Dependent	Enrollment Date	Tier
Subscriber + Spouse	Single + 1	Child	14-Feb	Family
Subscriber + Spouse	Single + 1	Child	24-Feb	Single + 1

In this example the Child only counts towards the premium tier in the first line because the enrollment date is before the "Enrolled Days Threshold" of 15.

Table 3. Term Enrollment

Current Enrollment	Current Tier	Term Enrollment	Enrollment Date	Tier
Subscriber + Spouse	Single + 1	Spouse	14-Feb	Single
Subscriber + Spouse	Single + 1	Spouse	24-Feb	Single + 1

In this example the Spouse only counts towards the premium tier in the second because the termination date is after the "Enrolled Days Threshold" of 15.