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Administrator Guide
Last Updated: 2023-06-23
Create Insurance Rates

Create Insurance Rates

Security:
Set Up: Benefits
 in the Benefits functional area.
Create rates containing insurance plan costs.
If rates vary by demographic factor such as age or length of service, you can add demographic bands with their corresponding rates. Workday uses this information to calculate the correct rate based on each employee's demographic information.
  1. Access the
    Create Insurance Rate
     task.
  2. Select the
    Method for Rate Calculation
    .
    Ensure that you select the same method as provided by your provider. Or, convert the rate amounts or percentages from the provided rate to your selected rate method:
    • The amount of coverage.
    • The amount of covered salary.
    • A flat amount (these rates are per covered individual).
    • A flat amount per covered dependent (these rates are per covered dependent).
    Flat rates represent the cost of the benefit per covered individual. Example: The cost of dependent life insurance is 10 USD per month for each dependent. A worker who elects to cover a single dependent pays 10 USD per month. Another worker elects the same benefit for 4 dependents and pays 40 USD.
  3. (Optional) Select the
    Demographic Factors to Consider
    .
  4. (Optional) Select the
    Gender
     or
    Tobacco
     check boxes.
    If you select the
    Gender
     check box, the rate table includes a
    Gender
     column so you can enter rates based on
    Female
    ,
    Male
     or
    Not Declared
    .
    If you select the
    Tobacco
     check box, the rate table includes a
    Tobacco Use
     column so you can enter rates based on
    Do Not Use
    .
    Workday creates a table with banded rates based on the selected demographic factors. You can't change these demographic factors after Workday creates the table.
  5. The
    Benefit Rate Source
     tab displays for
    Amount of Salary
     rate types. As you complete this tab, consider:
    Option Description
    Salary Source
    If you select
    Salary
     as a demographic factor, specify what factors Workday should use to retrieve the employee and employer rates. Consider:
    • Benefits Annualized Rate or Compensation Elements:
       If available, Workday uses the benefits annualized rate. If not available, Workday uses compensation elements. If you select this option, the
      Compensation Element
       field becomes available.
    • Benefits Annualized Rate or Total Base Pay:
       If available, Workday uses the benefits annualized rate. If not available, Workday uses the base salary.
    Benefit Annual Rate Type
    Available if you selected
    Benefits Annualized Rate or Compensation Elements
     or
    Compensation Elements
    .
    Compensation Element
    Available if you selected
    Benefits Annualized Rate or Compensation Elements
    .
    Salary Frequency
    Available if you selected
    Salary
     as a demographic factor.
    Select if the salaries in the rate band are weekly salaries, monthly salaries, or use a different frequency.
    Calculate As Of
    If you select age, length of service, or salary as demographic factors, select the date Workday uses in its calculations. Consider:
    • Coverage Begin or Plan Year Begin
      : Workday uses this date if the employee had coverage from the beginning of the plan year. Otherwise, Workday uses the date the employee originally enrolled in the plan.
    • Coverage Begin or Specific Date:
       Workday compares the original enrollment date of the benefit plan with the
      Specific Month and Specific Day
       field. It uses the most recent date to retrieve the value and assumes that the year is the current benefit plan year. If you want to use the prior plan year values, select the
      Of Prior Plan Year
       check box.
    • Coverage Begin:
       Select to prevent workers from moving between age bands over time. Workday uses the date the worker first enrolled in the plan at the current coverage level.
    • Event Date
      : Select to enable Workday to evaluate salary band changes when a worker's salary changes. The rate changes dynamically if the worker has a salary change that moves age bands.
    • Last Date of Previous Pay Period
      : When an employee has a birthday that moves them into a new age band, the new age band becomes effective the pay period following the one in which the birthday occurs.
  6. On the
    Apply Rate Per
     tab, consider:
    Option Description
    Apply Rate Per
    The value that the amount specified by the
    Method for Rate Calculation
     is divided by.
    Example: The
    Method for Rate Calculation
     is
    Amount of Coverage
    . You specify 1,000 as your
    Apply Rate Per
     amount. If the worker has a coverage amount of 40,456 USD, then Workday divides this coverage amount by 1,000, and applies the relevant
    Rounding Rule
    .
    To get a more granular result on higher coverage amounts, divide this field value by the rate amount of 1000.
    Example: You apply a rate amount of 0.19 to every 1,000 USD of coverage:
    • Divide by 1000 and the rate amount becomes 0.00019 and
      Apply Rate Per
       is 1.0. If your coverage is 124,560 USD, the result is 23.67 USD.
    Rounding Rules
    Specifies how to round a coverage amount, in case the coverage amount isn't evenly divisible by the
    Apply Rate Per
     amount. Workday multiplies the rounded amount by either the
    Employer Cost
     or
    Employee Cost
    , or both, on the
    Rate Amount
     tab.
    • Round Up:
       Example: The employee's coverage amount is 3173.33 USD. The
      Apply Rate Per
       amount is 100. Workday rounds up to 3200 USD.
    • Round Down:
       Example: The employee's calculated coverage is 42,400 USD. The
      Apply Rate Per
       amount is 500. Workday rounds down to 42,000 USD.
    • Round Up On Number:
       The most flexible rounding rule. After Workday divides the coverage amount by the
      Apply Rate Per
       amount, it compares the remainder against the value in the
      Round On Number
       field. If the remainder is less than the
      Round On Number
      , the coverage amount rounds down. Otherwise, the amount rounds up. Example: The amount in the
      Round On Number
       field is 500. The
      Apply Rate Per
       is 1000. If the employee coverage is 1,500 USD, then Workday rounds up to 2,000 USD.
Pay attention to effective dates. If you selected
Benefits Annualized Rate
 as the
Salary Source
, pay close attention to effective dates when loading the benefits annual rate. Example: You load a conversion event effective 1/1, but then load the employee's compensation or BAR as of 4/1. In this scenario, Workday isn't able to calculate the coverage.
The rate used to calculate an employee's benefit costs can vary based on the
Method for Rate Calculation
.
Example:
  • When Salary = Base Salary, Workday returns a value of 50,000 USD.
  • When Salary = Compensation Elements (Base Pay + Car Allowance), Workday returns a value of 65,000 USD for the same employee.
In the rate table, each of these values might have a different rate in each band: 0.13 for 1 - 59,999, 0.15 for 60,000 - 129,999, and 0.16 for 130,000 - 999,999,999 USD.
Use the:
  • Edit Insurance Rate
     task to edit the rates.
  • Insurance Rate
     report to view detailed information about the rates.
  • Create Benefit Plan
     task to associate the rates with insurance plans.