Friday Feature - Automating Mid-Year Benefit Changes

Benefit costs are a huge part of employee costs. Some like the costs to be taken in the month that they occur, while others like the cost to be annualized across the fiscal year, including arrears periods. Employees like the annualization of their benefit costs because they can then budget their pay accordingly. Districts like it for the same reason. But what happens when an employee changes benefit providers mid-year? Do you have to recalculate everything? The answer is YES, the costs must be recalculated! The answer also is Escape Online will do this for you automatically!

Escape Online allows you to relate benefit providers through benefit groups so that if an employee with annualized benefits changes providers during open enrollment (mid-year), then Escape Online can correctly calculate the benefit costs.

Amazing! This is how it works.

Let’s say we have an employee that is on a 10 month pay cycle but their medical costs are paid in equal amounts every month, including summer months. Now, let’s say that this employee changes from Blue cross to Kaiser in January and that means there is a change in their costs.

  • Blue Cross monthly amount = $100 thru December
  • Kaiser monthly amount = $110 starting January

If they had stayed on Blue Cross, they would need $200 in a “summer bucket” to pay for the summer month’s premiums (2*100=200). So, from September through December an extra $20 has been taken from their paycheck to cover those summer premiums, but now their premium has changed and so has the amount required for the summer bucket. Now they are going to need $220 in the summer bucket for new Kaiser premium (2*110=220).

Escape Online uses the Benefit Group relationship between Blue Cross and Kaiser to help calculate what the employee has in the current summer bucket (4*20=80) and what the new deduction needs to be to have the correct amount for new summer bucket premium (220-80/6=23.33).

Benefit Groups
Benefit Groups

You can create a Benefit Group, like Medical, to create a relationship between all of your medical providers, like Kaiser and Blue Shield. You can do the same for Vision and Dental. Specifically, you go to the Benefits Group activity, type in the name of the group, and then go to the Benefit Providers activity and assign that code to a provider. Like this.

Now, when an employee changes providers mid-year, Escape Online uses the Benefit Groups to determine how much was paid to each provider and calculate/recalculate rates for the rest of the year and for arrears periods in particular.

Now that's a calculation you can count on.

NOTE: It is best to implement Benefit Groups at the beginning of a fiscal year, but you can implement mid-year. To implement mid-year, please contact Escape Customer Care.