Plan Based Contributions
Plan based contributions allows a plan to be set as the basis for which an employer is contributing to coverage, and if the employee would like to enroll in a richer plan, the employee can pay the difference in cost. This option was designed to be used on age banded and ACA rated plans where the employer contribution is a % of the cost but can be set on plans that offer an employer contribution as a flat $ amount as well. This option allows employers to offer multiple medical plan options, and provide a contribution structure that supports a basic plan and encourages employees to share in the additional costs of selecting more costly plans.
Plan Based Contributions simplify the contribution setup on the more expensive plan. Instead of adding in age banded rates for the difference in cost, simply select the plan based contribution option and leave the math to us!
Plan Based Contributions cannot be copied between companies.
Employer offers two medical plans, Bronze and Silver. The rates are age banded. The employer is contributing 50% of the employee only coverage for the Bronze plan. If the employee would like to enroll in the Silver plan, they will pay the difference between the cost of the Silver plan and their cost if they had enrolled in the Bronze plan.
|EE Only by Age||Bronze Rate||Bronze EE Cost||Silver Rate||Silver EE Cost|
If a 25 year old enrolls in the Bronze plan, his cost would be $155.50. If he wanted to purchase the Silver plan, the employee would need to pay the difference between the Silver plan cost, and the what he would have paid had he enrolled in the base plan.
Employee Cost = Cost of Base Plan + difference between the enrolled plan and the base plan.
$330.50 = $155.50 + ($486 - $311)
Note: if your base plan is the more expensive plan, the surplus on the lower cost buy-up plan could apply to the dependents.
- Base plan must be active
- Plan Rates must be ACA or Banded
The Employee level contribution on the base plan must be % based (or $ based - the Base plan cannot already be set as a Buy-Up Plan)
Plans must have the same plan year start and end dates
Rates filled out for the same coverage level tiers
Plans must have the same rate structure
Configuring Plan Based Contributions:
When plan qualifies for plan based contributions (see assumptions above), from the medical plan contributions sub-tab, when adding in contributions there will be an option to select Plan Based Contributions. When using plan based contributions, select the "Base Plan" from the drop down menu. No additional contribution information is needed, since the cost will be determined by the base plan contribution.
If you do want to use plan based contributions, select "Do Not Use Plan Based Contributions" and add the contribution information for this plan.