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OHBEN062 - Define Cost Variants

OHBEN062 - Define Cost Variants

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In this step you define cost variants to determine which factors influence the cost of an insurance plan for an employee. Variants are plan-specific; each plan has its own variant(s).

You do not enter any actual costs in this step. You simply define the possible ways in which costs for a plan can vary depending on selected criteria. You determine how costs vary for coverage options in the step Define Insurance Plan Attributes.

Before you start to define cost variants, you need to do the following:

  1. Determine how often cost varies for different coverage options:
  • If an insurance plan has set flat coverage options and flat costs, you need to define a cost variant for each flat cost.

  • If you have set flat coverage options and the flat costs are directly proportional to the coverage stated in the flat cost, you need only one cost variant.

  • If an employee can choose any amount of coverage within a range and the cost of the coverage is directly proportional to the coverage, you need only one cost variant.

  1. Determine how costs vary according to employee data.
This determines how you need to set up your variants using employee groupings.
For each variant, you can specify a parameter group and cost grouping to determine cost. You can also indicate whether the gender of employees and whether or not they are smokers are cost criteria.

The Standard Life insurance plan has two coverage options:

  • $40,000
  • $70,000

In each case, the cost is directly proportional to the coverage chosen by the employee.

The cost of the plan varies according to the employee's salary and age. The provider also offers a lower rate for non-smokers.

Standard Life needs only one cost variant STLI with the parameter group STRD, from which the salary, age, and smoker groups are used.

You have created any parameter groups that you want to assign to your variant in the step Define Parameter Groups.

  1. Select the period for which the variant is valid.
This period applies to all rules associated with the variant.
  1. Specify the criteria that are relevant to the calculation of cost in the variant.
    1. If required, enter a parameter group and indicate which of the referenced employee criteria groups you want to use.
    2. Set the Cost grouping indicator if you want to use this feature to group employees.
    3. Indicate whether the gender of the employees and whether or not they are smokers are cost criteria.
    4. Specify whether the age, gender, and/or smoker data of the employee, spouse, or domestic partner is used as the basis for calculating cost.
    5. Set the Step limit indicator if you want to define a graduated cost calculation for different levels of coverage.





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Length: 3640 Date: 20240523 Time: 174451     sap01-206 ( 50 ms )