Composite Medical Rates
What is it?
Composite rates support singular rates for all employees based on enrolled coverage level. Rates do not vary based on employee age, gender, tobacco status, etc.
- Ex: The monthly cost for Employee only coverage is $500, Employee + Spouse coverage is $650, Employee + Child(ren) is $600, and Employee + Family is $1000.
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 "Composite".
Max # of children for +children tier: This is for the rare plan that defines a maximum number of children on the Employee + Children coverage level tier before being considered Employee + Family.
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.
Under a medical plan, in the Costs section, after selecting the Composite option under rates, the new Composite Rates tab will allow multiple coverage level rates to be added. If the plan only allows for certain coverage levels, only add a value for those levels. Click "Show All" to see all coverage levels that are available.
Composite rated medical plans can be configured as either fully-insured, or self-insured. If the plan is self-funded, check the box for Plan is self-funded. Three additional columns for inputting plan cost info will display: Specific Deductible, Admin Fee, and Agg. Premium. These fields are to be used as a reference point for the employer, and are not calculated in employee costs and/or enrollment records. If the plan is fully-insured, leave the box unchecked.
Input the total monthly plan rates as defined by the carrier for all applicable coverage level tiers. To view additional tier levels, click show all.
The following tier levels are supported under composite rated plans: Employee, Employee + Spouse, Employee + One, Employee + Child, Employee + Spouse + Child, Employee + Two, Employee + Two Children, Employee + Spouse + Two Children, Employee + Three, Employee + Three Children, Employee + Spouse + Three Children, Employee + Four, Employee + Child(ren), Employee + Family, Domestic Partner
System Limitation: The Domestic Partner tier level applies to Employee + Domestic Partner coverage only. If an employee enrolls additional dependents in coverage, the enrollment record will reflect the applicable family tier level listed for the plan. Alternatively, if an employer supports domestic partner coverage and the Domestic Partner tier is not configured, the system will automatically enroll the domestic partner under the applicable Spouse tier.
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?
Composite Rates will look at who the employee is enrolling to determine the monthly premium. The system will calculate the rate based on the dependents being enrolled. If no dependents are being enrolled, they will be calculated at the employee only coverage.
The employee's cost will be calculated by taking the applicable composite and subtracting the amount defined in the contribution settings to provide a monthly premium. That monthly premium will then be divided by the number of payroll deductions defined in either the payroll calendar or the class pay frequency.