Banded Medical Rates
What is it?
Banded medical rates support age, gender, and tobacco banded rates, where only the employee is rated based on his/her age, gender, and tobacco status, then on enrolled coverage level. With this rate option, the system does not look at spouse age, gender, or tobacco status.
- Ex: The monthly cost for employees From Age 30 To Age 34 for Employee only coverage is $500, for Employee + Spouse coverage is $700. The monthly cost for employees From Age 35 To Age 39 for Employee only coverage is $525, for Employee + Spouse coverage is $725.
How do I set it up?
Under a medical plan, in the Costs section, Rates will allow you select from one of the 4 types of medical rates supported. Select "Banded".
Rates are banded by: Check off all applicable banded rate options (Age, Gender, and/or Tobacco), then click Save.
Years of Service change option: This field defines when to recalculate contributions that are based on a Dynamic Class that includes a Years of Service condition.
- Day of Change: Rate will change the day the employee's work anniversary.
Example: Contributions are based on years of service 0-5 years and 5-10 years. An employee's 5 year work anniversary is on 5/15/2018, their rates will change on 5/15/2018.
- First of following month: Rate changes on the first of the month AFTER their employment anniversary.
Example: Contributions are based on years of service 0-5 years and 5-10 years. An employee's 5 year work anniversary is on 5/15/2018, their rates will change on 6/1/2018.
- Policy anniversary: Rate will not be updated until policy renewal.
Caution: If plan is configured with a day of change or first of the month following change rule, and enrollments change due to employee's anniversary, moving them into a different contribution tier, if the plan rule is changed to policy anniversary, a rate recalc will not UNDO the rate change that already occurred.
Banded rates can be based on the following conditions: Everyone, Class, Department, Division, Business Unit, Office Location, Dynamic Class, Tobacco Use, On Wellness Program, Decision Maker, Is Full Time, and Is Exempt.
Select the corresponding drop-down option for Based on and click +Add to begin building out the brackets. For each bracket, input the beginning age (for that bracket) in the From Age field, the end age (for that bracket) in the To Age field, and the monthly rate for all applicable conditions and coverage tier levels. When finished, click Save. Continue steps until all age brackets have been configured.
There should be no overlap or gap between the different age brackets. For example, age brackets should look something like this:
From Age 30 To Age 34
From Age 35 To Age 39
The contribution tab allows configuration of the amount given to employee based on the coverage levels selected. for more information on configuring contributions, check out Plan Setup: Medical Contributions.
How does the calculation work?
Banded medical rates are calculated based on the conditions selected (age, gender, and/or tobacco) for the employee as well as the coverage level that is being elected.
An employee who is 23, male, and is a smoker would have a monthly premium of $420.25 for employee only coverage. If that employee enrolled his wife and kids, the monthly premium would be $810.32.
Note! If rate is based on the age, employees will be rated at the calculated effective date. If an employee has an effective date of 5/1/2018 and their 25th birthday is on 5/18/2018, they will be rated at the 24 year old rate.