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OHBEN1122B - Define Cost Variants

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In this step you define cost variants to determine which factors influence the cost of a health 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 plan options and dependent coverage options in the step Define Health Plan Attributes.

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

1. Determine how often costs vary for all the combinations of option and dependent coverage that you have defined in each plan.

This indicates how many cost variants you need. You can use the same cost variant more than once, for example, if costs are always identical for the dependent coverages 'employee only' and 'employee plus family' within a plan, regardless of the plan option.

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.

In the Standard Medical plan, Option I allows the following dependent coverages, and the following cost variants are created for them:

Dep. coverage	Cost variant
EE	STRI - Standard cost I
EE+1	STRI - Standard cost I
EE+C	FAMI - Family cost I
EE+F	FAMI - Family cost I

Both the STRI and FAMI cost variants use the cost grouping feature to determine costs for different groups of employees. STRI also uses 'smoker' as a criterion.

Option II has identical dependent coverages and cost variant criteria. But because the deductible is higher than in Option I, the costs are lower. This means that different cost variants are required for Option II:

Dep. coverage	Cost variant
EE	STII - Standard cost II
EE+1	STII - Standard cost II
EE+C	FAII - Family cost II
EE+F	FAII - Family cost II

EE+F

• You have defined all the health plan options and dependent coverages that you require.

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

EE+F

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.

EE+F




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