Benefits Definition – An Overview

The Benefits Definition Component follows a three-tier model consisting of Programs, Plan types and Plans. As it is rightly named this component helps in defining the various plans, plan types and programs. The main functions of this component are to,

•  Create a Benefit Program

•  Create a Benefit Plan type

•  Create a Benefit Plan

•  Maintain Cafeteria Plan Details

This component is of primary importance from a larger perspective as the information, which is defined here, is mapped to various activities spread across the Benefits process.

Create Benefit Program

A Benefit Program forms the top tier of the Benefit Object Definition. The various attributes mapped to the Benefit Year are primary participant eligibility profiles, dependent eligibility profiles, Benefit Years, Waive Reasons, currency for premium payment, Frequency of Premium Processing, calculation rules (for salary, age, service months and actual hours) specific to the Program and applicable org units.  This activity helps in creating different benefit programs for an organization unit.

Create Benefit Plan Type

A Benefit Plan type is the middle tier of the Benefit Object Definition. It inherits all the attributes of the parent Benefit Program. If required, these attributes can be changed for a specific Plan Type, but this change will only affect that particular Plan Type and the Plans defined under it, and not to the other Plan types under the same program. To every Plan Type, it is mandatory to map a Plan Category. Five different plan categories have been identified under this category, viz. Savings, Health, Life and Accidental Death/Dismemberment, Disability and Flexible Spending Account.

Create Benefit Plan

A Benefit Plan is the last tier of the Benefit Object Definition. In this layer, all the Plan Category specific and enrollment specific details are given. Among other things, the important entities mapped to the plan are Provider for the Benefit Plan, Rate table or a stored procedure to compute the premium payable by the employee and employer. It is at this level, where the Plan contribution or coverage details are specified along with other mandatory specifications like participation periods, premium payment frequency, etc. In Benefits Administration, the employees are enrolled to a Benefit Plan.

Maintain Cafeteria Plan Details

This activity enables you to specify details for cafeteria-enabled plans. The details can be specified at the program level/ plan type level/ plan level. A cafeteria plan is a flexible employee benefit plan that enables the employee to choose from a menu of certain fringe benefits and pay for all these benefits with pre-tax dollars.

Other Activities

Apart from the above said main activities in this component there are a few other activities, which are equally important. They are,

•  Defining Calculation Rules

•  Editing Plans, Plan Types, Programs.

•  Viewing Plans, Plan Details, Program Details, Calculation Rules

•  Perform Non-Discrimination Testing.

•  Set Non-Discrimination Testing Parameters.

•  Mapping Plan Contributions to an account

The above said activities play a major role in defining calculation rules like the salary, age, service months based on the premium and coverage amounts of the plans. They enable the user to edit records pertaining to various Plans, Plan types, and Benefit programs. Apart from creating and editing the records this component provides you the facility to view the created or modified records. Another major activity, which enhances this component further, is the Perform Non-Discrimination Testing activity. This activity is done to find out the bias if there is any, concerning the contributions in various plans by highly compensated employees. The Mapping plan contributions to an account activity enables you to map each plan contribution with a General Ledger Account number.

Getting familiar with the activities inside