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Configure rates

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Rates define how much employers and employees contribute for a benefit. The value can be either an amount or a number of flex credits, depending on your configuration.

Use rates to determine how much employees and employers pay for each benefit, based on several factors. Coverage rates are date-effective, so you can keep a historical record of rates.

Set up rates

  1. In the Benefits management workspace, under Setup, select Rates.

  2. Select New.

  3. Specify values for the following fields:

    Field Description
    Rate A unique name that identifies the benefit rate.
    Description A description of the benefit rate.
    Effective The date when the rate becomes effective. The current system date is the default value. This date should be on or before your benefit period. A good practice is to set this date to the date of the benefit plan.
    Expiration The end date of the rate. 12/31/2154 (which represents never) is the default value.
    Use tiers Use this field if you have logic that must be used to determine a rate. For example, if a rate must increase based on age, select a value here. Select Single tier for a one-tier benefit rate or Double tier for a two-tier benefit rate. An example of a double tier is a tier that is based on gender and age. After you select a value, select Actions, and then select Tier rates. If you have a flat rate that doesn't change, leave this field blank.
    Payment frequency Specify how often the benefit premium rate should be paid to the benefit provider. The rates that you enter on the page that is described later in this article will be based on the payment frequency that you specify here. For example, if you enter Monthly in this field, and you enter an employee rate of $100, it's assumed that the benefit costs the employee $100 per month. However, an employee might be paid two times per month, based on the benefit payment frequency that is set on the employee record. In this case, when the employee signs into Employee self service, the amount that they pay will be $50, because the rate that Employee self service shows is based on the employee's payment frequency.
    Pay frequency rate rounding The methods for rounding the rate are: Standard, Truncated, Normal, Downward, and Rounding up.

    • Standard – Always round up. For example, 10.611 will round to 10.62. -10.231 will round to -10.23.
    • Truncated – Always round down. For example, 10.619 will round to 10.61. -10.231 will round to -10.24.
    • Normal – Decimal values ending in or greater than 5 will round away from zero. Decimal values ending in or less than 4 will round toward zero. For example, 10.615 will round to 10.62. -10.235 will round to -10.24. 10.614 will round to 10.61. -10.234 will round to -10.23.
    • Downward – Round toward zero. For example, 10.619 will round to 10.61. -10.231 will round to -10.23.
    • Rounding up – Round away from zero. For example, 10.619 will round to 10.62. -10.231 will round to -10.24.
    Non-smoker employee amount The amount the benefit provider charges for a nonsmoking employee. This is the amount the employer pays to the benefit provider and should be based on the payment frequency for the rate setup.
    Non-smoker employer amount The amount the benefit provider charges for a nonsmoking employee. This is the amount the employer pays to the benefit provider, and it should be based on the payment frequency for the rate setup.
    Smoker employee amount The amount the benefit provider charges for an employee who smokes. This is the amount the employer pays to the benefit provider and should be based on the payment frequency for the rate setup.
    Smoker employer amount The amount the benefit provider charges for an employee who smokes. This is the amount the employer pays to the benefit provider and should be based on the payment frequency for the rate setup.
    Administrative amount The administrative amount charged by a third-party administrator. This is the amount that the employer pays to the third-party administrator, and it should be based the payment frequency for the rate setup.
    Flex credit rate The number of flex credits the benefit costs. This is only applicable to rates that are for benefit plans that are associated with flex credit programs. If you use tier rates, the flex credit rate is defined in Actions > Tier rates.
    Change effective date The date when the benefit rate change takes effect. The system automatically changes the benefit rate and update all benefit plans associated with this rate, provided that you run Rate change update processing. Don't set this date unless you want the system to automatically update the employee benefit plans based on this rate. This is normally reserved to automatic future rate change processing. The Change effective date must be within the benefit rate effective and expiration dates.
    Rate change completed The Rate change completed check box will be automatically selected after the benefit rate changes have been completed by the Rate change update processing.

  4. To track and maintain changes to the benefit rate setup, select Actions, and then select Maintain versions.

  5. Select Save.

Set up tier rates

You can use tier rates in your rate setup if the rate varies depending on various factors. For example, you could configure tier rates to say that if your age is up to 34.99, then the non-smoker amount is 2. If your age is up to 39.99, then the non-smoker amount is 3.

You can also use double tiers. If you select Double tier for the Use tiers value on the Rate setup form, you can define rates based on two dimensions. For example, you could configure a double tire system to say that if you are male and your age is up to 34.99, then the non-smoker amount is 2. If you are male and your age is up to 39.99, then the non-smoker amount is 3. If you are female and your age is up to 34.99, then the non-smoker amount is 1.8. If you are female and your age is up to 39.99, then the non-smoker amount is 2.8.

Important

On the worker record, under Personal information there's an option that is used to indicate whether the employee is a smoker. If the employee is recorded as a smoker, the smoker rate will be used. (The smoker indication is never shown to the employee.)

  1. In the Benefits management workspace, under Setup, select Rates.

  2. Select one or more rates from the list, select Actions, and then select Tier rates.

  3. Select New.

  4. Specify values for the following fields:

    Field Description
    Description The Description field value is applied from the description in the rate setup record. This helps you identify which rate setup the tier rates are linked to.
    Tier code Select a tier code. Tier codes are defined in the Tier codes page. The system automatically displays the description of the tier code in the grid to the left.
    Tier type Specifies what field should be used as a selection criterion for the tier rate calculation process. For example:

    • If Age is used, the system will use the employee's birthdate in the benefit rate calculation process.
    • If Salary is used, the system uses the employee's annual benefit salary in the benefit rate calculation process.
    • If Job type is used, the employee's current active position record is used to determine the job type by the job record linked to the position.


    The tier types are Age, Salary, Physical, Gender, Full time equivalent, Job type, Compensation region, and Level.
    Level The value to use with the tier type during benefit rate calculation process. For example:

    • If the tier type is Age, this would be the age value.
    • If the tier type is Salary, this would be the salary amount.
    • If the tier type is Job type, this would be the job type.


    With a tier type of Age or Salary, the value in the Level field represents the lower bound of the tier. With a tier type of Job type, an exact match approach is used during tier rate selection.
    Calculation type Specifies how to use the amount in the calculation amount field and what math calculation to perform if necessary. If the calculation type is a flat amount, the amount fields is used as is. If the calculation type is per $ amount of salary or coverage, the calculation amount is used and calculation direction in its math calculation.

    If the calculation type is per $ amount of salary, the following math equation is used:

    Annual benefit salary divided by Calculation amount (rounded up or down) times the amounts for smoker or non-smoker for employee or employer.

    If the calculation type is per $ amount of coverage, the following math equation is used:

    Coverage amount divided by Calculation amount (rounded up or down) times the amounts for smoker or non-smoker for employee or employer.)

    In both calculations, the Calculation direction is used to determine whether to round the Annual benefit salary or Coverage amount divided by Calculation amount up or down.
    Calculation amount The amount to use during the benefit rate calculation process. This amount will be the divisor during the math calculation of the tier rate.
    Calculation direction The direction that the calculated result amount should be rounded. The system supports three calculation directions: blank (exact method), Increase, and Decrease.

    • If blank, the system will use the exact calculation of the salary/coverage amount divided by the calculation amount. If this value has a fraction, then this will be used in its calculation.
    • If Increase, the math calculation will increase the salary/coverage amount divided by the calculation amount to the next integer, which means 12.25 would increase to 13.
    • If Decrease, the math calculation will decrease the salary/coverage amount divided by the calculation amount to the current integer, which means 12.25 would decrease to 12.
    Non-smoker employee amount The amount a benefit provider charges for a nonsmoking employee. This is the amount the employer pays to the benefit provider, and it should be based on the payment frequency for the rate setup.
    Non-smoker employer amount The amount a benefit provider charges for a nonsmoking employee. This is the amount the employer pays to the benefit provider, and it should be based on the payment frequency for the rate setup.
    Smoker employee amount The amount a benefit provider charges for a nonsmoking employee. This is the amount the employer pays to the benefit provider, and it should be based on the payment frequency for the rate setup.
    Smoker employer amount The amount a benefit provider charges for a nonsmoking employee. This is the amount the employer pays to the benefit provider, and it should be based on the payment frequency for the rate setup.
    Administrative amount The administrative amount charged by a third-party administrator. This is the amount that the employer pays to the third-party administrator, and it should be based the payment frequency for the rate setup.
    Flex credit non-smoker rate The number of flex credits the benefit costs, based on the calculation defined for the tier level for non-smokers. For example, if the calculation type is Per $ amount of coverage, the calculation amount is 10,000, and the flex credit non-smoker rate is 6, that means that if a nonsmoking employee chooses $10,000 of coverage, it will cost 6 flex credits. If they choose $20,000 of coverage, it will cost 12 flex credits, and so on.
    Flex credit smoker rate The number of flex credits the benefit costs, based on the calculation defined for the tier level for smokers.

  5. Select Save.