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      How To -- Configure Benefit Plans with Proration of Premiums

      Purpose Statement

      This document outlines the steps for configuring benefit plans that will prorate premiums for mid-year enrollments

      Configuring Benefit Plans

      1. From the Admin tab, go to Company Settings>Profiles/Policies>Benefits>Plans
      2. Click on Add New Plan to create a new benefit plan.
      3. A pop-up screen will appear for you to fill in the plan type, number of earning/deduction codes, the coverage type, and the number of coverage levels

      Note: The Coverage Type must be a Coverage Amount option for proration functionality to appear.

      1. Once inside the benefit plan set up screen, fill out the plan as you normally would. 
      2. In the Deduction/Earning window, check the box next to Prorate Employee and Prorate Employer
      3. Once the plan is set up, click Save in the top right corner to save the plan.

      Proration Logic

      1. Prorate Employee and Prorate Employer functionality allows the application to calculate an amount that is closer to the desired prorated deduction amounts when an employee enrolls mid-year.

      Note: The system calculates an estimated prorated amount based on the month the employee enrolls, regardless of the actual day in the month the employee enrolled. For example, enrolling on 4/1 or 4/20 will result in the same Remaining Months Multiplier.

      1. The calculation used by the system gets the Average Monthly Multiplier based on the employee’s Pay Period Profile.

      Example: Biweekly employees have an Average Monthly Multiplier of 2.1666 pay periods per month (26 weeks/12 months = 2.1666)

      1. A new employee hired on ANY day in April will have 9 months left (April through December), because the system ALWAYS includes the current month of enrollment.
      2. The system calculates by taking the average number of pay periods per month times the remaining months in the year. This returns the Remaining Month Multiplier.
      3. The system then takes the requested amount of coverage by the Remaining Month Multiplier to get the employee premium.
      4. The Premium Field on the benefit plan can be set up to reflect something similar to CoverageAmount/12
      5. Because of this logic, the system calculated employee premium can be slightly off from the expected amount.