6 Configuring Different Benefit Types
6.5 Insurance
Introduction
Insurance plans provide the protection to the policy holder and its dependents from life's uncertainties or medical emergencies.
We work hard to provide the best to our families so that they lead happy and comfortable lives. Certain events like unexpected death of earning member, critical illness, medical emergencies, accidents, natural and man-made calamities, and so on can adversely affect our family's well-being and finances. Insurance plan provides protection for all such events.
Terms that you will come across in the following sections:
● Insurance Type: This refers to the different types of insurance plans to meet various needs.The common insurance types provided are:
○ Life/ Term Life
○ Health / Medical
○ Dental
○ Vision
○ Travel – Leisure/ Business
○ Occupational Disability
○ Long Term Disability / Accident
○ Short Term Disability
Note that, each plan type will have different parameters, rules, options or insurance levels, and electability
● Insurance Plan: A plan is the actual insurance provided to an employee by the Insurance provider or carrier.
For example, under the plan type Medical, a particular insurance provider could be offering:
○ Medical Plan 1
○ Medical Plan 2
○ Medical Plan 3
Note that, each plan may have varying coverage amounts, premium, areas of coverage, and so on.
● Coverage: It is the total amount for which an employee is insured in a particular insurance plan. For Life Insurance, the coverage is the total insurance amount. For Medical it could be the upper limit for expense reimbursement.
The amount of insurance coverage an individual or entity will have is determined by multiple factors. For example, most insurers will charge higher premiums for smokers as the probability of them being susceptible to illness is higher than a non- smoker.
Within a plan, an employee may choose a level of coverage. For example, in case of Medical Insurance employee can choose the following:
○ One Bed
○ Two Bed OR
○ 5,00,000 INR
○ 3, 00,000 INR
The levels will vary per plan type. For life insurance, the level for insured amount could be the following:
○ 3 X annual base salary
○ 6 X annual base salary
● Enrolling For: It refers to the person for whom an employee is seeking the insurance coverage. Options for Insurances are for enrolling either:
○ Self
○ Self + spouse
○ Self + Family
● Insurance Program: It refers to a collection on Insurance types an employee will be eligible for. Each insurance plan will be treated as an individual benefit. In case there are different programs eligible for hourly, monthly salaried, or retirees, expats - each will have a separate program.
For example: Insurance Program for Permanent Employees may include – Term life Insurance, Medical, Dental, Vision and Accidental plans. Whereas an Expat may only have term life and Medical covered.
● Insurance Provider: These are organizations which offer the insurances. The employees pays premium to them say on monthly basis and can claim insurance on need basis. Thus, these providers would have to be informed about employees joining, change in elections, employees leaving and so on.
● Rate: It refers to the employee’s contribution in the premium.
● Premium: Premium is the amount the employer pays to the insurance provider. A part of premium may be paid by the Employee which is deducted from payroll.
Premium = Employer Contribution + Employee Contribution (Rate)
● Benefit Wallets: Employees are awarded some credits (points) or equivalent money into an account which they can use to either pay for premiums, pension contribution or any other benefit. Some of these accounts lapse by end of financial year, and some may be carried forwarded either for a fixed period or for life.
6.5.1 Create Insurance Plan
The following image displays the fields that require your input while creating an insurance plan.
See Steps to Set up Insurance [page 13], to get an overview of system configurations required for creating insurance plan.
To create insurance plan, perform the following steps:
● Go to Admin Center and in the Tools Search field type Benefits Admin Overview. System opens Benefit Admin Overview screen. Select Create New – Benefit Insurance Plan.
● Plan Name: Specify the plan name
● Insurance Provider: Specify the details about the provider such as:
○ Provider Name
○ Contact Person
○ Contact Phone
○ Insurance Type
○ Useful Links
○ Policy Documents
● Employer Contribution Pay Component: Enter the pay component in which the system stores the employer premium contributions for the corresponding insurance plan.
● Employee Contribution Pay Component: Enter the pay component in which the system stores the employee premium contributions for the corresponding insurance plan.
● Premium Payment Frequency: Specify the premium payment frequency for example, monthly, quarterly, annual and so on. Note that, based on the employee’s selection the system reads the rate chart and accordingly displays the employee and employer premium contributions amounts on the screen and the frequency of premium payment
● Premium for: Select either Employee and Dependents or Dependents Only.
● Eligibility Rule for Plan: Select the eligibility rule to define eligibility criteria for the coverage per insurance plan.
● Coverage Options: Specify the coverage and enrollee details.
○ Enrollment For: Select the relevant enrollee object. Choose the add button to create a detail object. If you click on this button object details screen appears. Enter the data in the following fields:
○ Enrollee Options Name: Enter the name of the enrollee option.
○ Dependent Option: Select the dependent option for enrolling from the drop down list. The options include Self, Self + Spouse, Self+ Family. The dropdown values are maintained in
benefitInsuranceDependentOption picklist ID. You can add/ delete entries from this picklist. The system activates this field only if you have chosen the premium type as Employee and Dependents.
○ Select Allowed Dependent Type: Select the value in relationship type such as father, mother, spouse and so on. The dropdown values are maintained in relationShipType picklist ID. You can add/ delete entries from this picklist.
○ Coverage Details: Enter the following details:
○ Coverage: Select the relevant coverage object. Choose the add button to create a detail object. If you click on this button Benefit Insurance Coverage screen appears. Enter the data under Coverage Details :
○ Coverage Name: Specify the coverage name.
○ Coverage Type: Select the coverage type from the drop down list. The options include Amount, Percentage, Factor or Others.
○ If you choose Amount, enter the coverage amount in Amount field and also select the relevant currency.
○ If you choose Percentage, enter the percentage value in Percentage field and also choose the relevantvaluein either Pay Component field or Base Pay Component Group field. For example, if you enter 50 in Percentage field and select base salary in Pay component field the system calculates/ sets the insurance coverage as 50 percent of the base salary.
○ If you choose Factor in this field, enter the factor value in Factor field and also select the relevantvaluein Pay Component or Base Pay Component Group fields. For example, if you enter 2 in Factor field and select base salary in Pay component field the system calculates/
sets the insurance coverage as 2 times the base salary.
○ If you choose Others, values saved in the picklist benefitInsuranceCoverageLevel will be displayed in Coverage Level field.
After you save your entries, the system generates a unique coverage ID. Enter/ choose the relevant coverage value.
○ Rate Chart: Select the relevant rate chart object. If you don’t have one, create it using the add button.
○ Benefit Salary Calculation/Rounding Rule:Select the relevant rule. This rule alters the employee’s salary before calculating the coverage amount. The altered amount is stored in Benefit Salary field.
During execution, the rule reads the salary from Benefit Salary field and based on the other rule parameters, it calculates the revised (rounded off) salary that the system must consider for calculation of coverage amount.
For example, it can either round off or grade the salary component. The system executes this rule prior to calculating the coverage amount.
○ Coverage Rounding Rule: This rule rounds off the coverage amount. The system first calculates coverage and then applies this rule. The premium is then calculated on the rounded coverage which is derived by the rule.
Note
You can either assign both Benefit Salary Calculation/Rounding rule and Coverage Rounding rule or you can also assign only one of them or neither of them. Both these fields will always be visible when coverage type is either Percentage or Factor, even when not used.
○ Benefit Salary: Displays the rounded off salary based on which the Benefit Salary Calculation/
Rounding Rule determines the coverage amount. This field will come up only if the coverage type is either factor or percentage. During execution, the rule reads the salary from this field and based on the other rule parameters, it calculates the coverage amount. Note that this field is only required for calculation purpose and will be not be visible to the user on the Create Insurance Plan screen
○ Rounded Coverage: Displays the rounded off coverage amount based on which the Coverage Rounding Rule determines the premium. This field will come up only if the coverage type is either factor or percentage. During execution, the rule reads the coverage from this field and based on the other rule parameters, it calculates the premium amount. Note that this field is only required for calculation purpose and will be not be visible to the user on the Create Insurance Plan screen.
Example
Scenario 1: Benefit Salary Calculation/Rounding Rule (Rounding of Salary)
Assume the coverage is two times the employee’s annual salary; that is, 2 x annual salary and the annual salary of an employee is $ 122, 345. Here, the annual salary must be rounded off to the nearest $ 1000, before multiplying it by 2 to calculate the coverage amount. Based on the Precision and Threshold values that you maintain, the system will calculate the coverage amount.
● If you maintain Precision as -3 and Threshold as -1, the rule will round off the number to the next 1000. In this case $ 122, 345 is rounded off to $ 123,000. The coverage amount is 2 x $ 123,000
● If you maintain Precision as -3 and Threshold as null, the rule will round off the number o back to 1000. In this case $ 122, 345 is rounded off to $ 122,000.The coverage amount is 2 x $122,000
You must configure rule similar to the one mentioned below:
After creating the rule, the same should be assigned to Benefit Salary Calculation/Rounding Rule field in InsuranceCoverage MDF.
Scenario 2: Coverage Rounding Rule (Rounding of Coverage)
Assume that the coverage is two times the employee’s annual salary; that is, 2 x annual salary and the annual salary of an employee is $ 51,480. System will first calculate the coverage which is $102,960 (2 x 51,480) and will then apply the rounding off rule. The premium is calculated on the rounded coverage which the rule computes.
Here, the coverage must be rounded off to the nearest $ 1000.
Based on the Precision and Threshold values that you maintain, the system will calculate the coverage amount.
● If you maintain Precision as -3 and Threshold as -1, the rule will round off the number to the next 1000. In this case $ 102,960 is rounded off to $ 103,000.
● If you maintain Precision as -3 and Threshold as null, the rule will round off the number back to 1000. In this case $ 102,960 is rounded off to $ 102,000
You must configure a similar rule as shown in scenario 1 and assign the same to Coverage Rounding Rule field in InsuranceCoverage MDF
Scenario 3: Premium based on Graded Salary Assume the annual salary is $56,527.38
The monthly salary be $56,527.38/12 = $4710.615
Based on the monthly salary the system gardes the salary based on the criteria you define. This plan is on the following graded benefits:
60% of 1st $3001, and 50% of the remainder
Since $4710.615 is greater than $3001, the salary on which the premium rate is applied is calculated as follows:
60% of $3001 + 50% of ($4710.615 - $3001 ) = $1800.60 + $ 854.81 = $2655.41
You must configure the rule similar to the one shown below. After creating the rule, the same should be assigned to Benefit Salary Calculation/Rounding Rule field in InsuranceCoverage MDF.
Note that, you must refer Rules Handbook for the details regarding the usage of Round() functions and other functions provided by the rules framework.
Related Information
Quick Steps to Get Going [page 9]
6.5.2 Insurance Rate Chart
System uses the rate chart to determine the premium that an employee and employer must pay for a given coverage. The system calculates this premium based on the different parameters that you maintain in the rate chart.
An admin can define a rate chart for each plan and provider. To create rate chart, perform the following steps:
1. In Admin Center, search for Benefit Admin Overview and double click on it. System opens Benefit Admin Overview screen. Select Create New – Benefit Insurance Rate Chart.
2. Enter data in the following fields:
○ Age as of Year: Select the value based on which, the system calculates the employee’s age to determine the premium contributions.
If you select Enrollment Year, the system calculates an employee’s age as on the year in which the employee enrolls for a particular insurance plan.
If you select Enrollment Effective From, the system calculates the employee’s age based on the year in which the insurance enrollment is effective.
For example, Carla Grant was born on December 1, 1980. She enrolls for an insurance plan on November 1, 2014. This plan is effective from January 1, 2015. This particular insurance plan runs from January to December every year.
Based on the value that you select in Age on Specific Year field, this is how the system determines her age for premium contributions:
○ If you select Enrollment Year (which is November 1, 2014) in this field, the system computes Carla Grant’s age as 33 years. So from January 2015 to December 2015, she pays the premiums for a 33 year old, despite turning 34 years in December 2014.
From January 1, 2016, she will begin paying the premiums applicable for 34 year old.
○ If you select Enrollment Effective From (which is January 1, 2015) in this field, the system computes her age as 34 years.
○ Gender Relevant: Specify if the gender is relevant for calculation of premium rate.
○ Age as-of Day: Specify the day as on which the employee age should be considered for calculating the premium amount.
○ Age as-of Month: Specify the month as on which the employee age should be considered for calculating the premium amount.
○ Effective Start Date: Specify the date from which a particular rate chart is effective.
○ Insurance Plan: Specify the plan name.
○ Insurance Provider: Specify the provider name
○ Insurance Coverage: Select the relevant coverage object. Choose the add button to create a detail object
○ Rate Chart ID: Enter the ID.
○ Factor: Specify the amount based on which the system calculates the premium for a particular coverage.
For example, premium rate could be an amount per 1000 EUR. Let’s assume that the coverage is 2 X Annual salary of the employee. Annual salary of the employee is 10,000 EUR. Monthly premium is defined as 0.5 EUR per 1000 EUR of coverage. In this case the coverage and premium will be calculated as follows:
○ Coverage= 2 X 10,000 (Annual salary) = 20,000 EUR
○ Factor= 1000
○ Premium Rate= 0.5 EUR
○ Actual Premium= 0.5 X coverage (20000) / factor (1000) = 10 EUR per month.
Note that if the premium is a flat amount then factor will be -1.
○ Rate Chart for Plans Covering Employee and Dependents: In this case, the system calculates the lump sum premium amount irrespective of the no of dependents you enroll.
○ Rate Chart Type: Select the relevant chart type
○ Age From: Specify the minimum age from which the particular premium rate is valid.
○ Age To: Specify the maximum age until which the particular premium rate is valid.
○ Enrollment For: Select the person for whom an employee is seeking the insurance coverage. You have the options such as self, self + spouse, self + family.
○ Smoking: Select the smoking habit of the employee.
○ Gender: Select the gender of the employee.
○ Employee Contribution
○ Employer Contribution
○ Rate Chart for Plans Covering Dependents only: In this case, the premium amount is calculated separately for each dependent that you enroll.
○ Rate Applicable For: Select the relevant type, such as, individual or group. In case you select Group, the system calculates the lump sum premium amount irrespective of the number of dependents you enroll. If you select Individual, the premium amount is calculated separately for each dependent that you enroll.
○ Dependent Type: Select the relevant type, such as, mother, father, spouse and so on.
○ Age From: Specify the minimum age from which the particular premium rate is valid.
○ Age To: Specify the maximum age until which the particular premium rate is valid.
○ Smoking: Select the smoking habit of the dependent.
○ Gender: Select the gender of the dependent.
○ Employee Contribution
○ Employer Contribution Import/ Export Rate Chart via Excel
1. Download Template Perform the following steps:
1. Go to Admin Tools and choose Import and Export Data. System opens Import and Export Data pop up screen.
2. Select Export Data in Select the action to perform field.
3. Select Insurance Rate Chart in Select Generic Object field.
4. Select No in Include dependencies field.
5. Select Yes in Select all data records field.
6. Click on Export.
2. Download the template from Process Job Monitor.
3. Fill data in rate chart template with required data and save it in your local system.
4. Import this Template
Perform the following steps:
1. Go to Admin Tools and search Import and Export Data. System opens Import and Export Data pop up screen.
2. Select Import Data in Select the action to perform field.
3. Choose CSV File radio button.
4. Select Insurance Rate Chart in Select Generic Object field.
5. Click on Choose File and select the template that you have saved in your local system.
6. Click on Import.
Similarly you can Import/ Export template for Rate Chart for Plans Covering Dependents only and Rate Chart for Plans Covering Dependents only.
Example
Rate Chart for Plans Covering Dependents only Step1: Downloaded template.
Step 2: Check in process job monitor for success or failure of import.
Step 3: Output after successful import of the template.
Related Information
Quick Steps to Get Going [page 9]
6.5.3 Create Insurance
The following image displays the fields that require your input while creating the insurance.
To configure the Insurance benefit in your system, perform the following steps:
1. Go to Admin Center and in the Tools Search field type Benefits Admin Overview. System opens the Benefits Admin Overview screen. Select Create New - Benefit.
2. Select Benefit type as Insurance.
3. Enter the generic data such as benefit name, type and so on. For more information, see Create Benefit - Generic Data [page 55].Apart from the generic fields, the below mentioned fields are also available:
4. Insurance Type: Select the relevant type such as Life, dental, Medical and so on. Note: The dropdown values are maintained in insuranceType picklist ID. You can add/ delete entries from this picklist. For more information see section Create a Picklist.
5. Deduction Start Date: Select the required value. This field has the following values:
○ As of Date: Here the system creates both the enrollment and deduction entries effective from the date the
○ As of Date: Here the system creates both the enrollment and deduction entries effective from the date the