Rate Calculator for Standard/Composite Rate Disability Plans
Purpose: This help guide will show you how to set up the disability rate calculator for standard/composite-rate disability plans.
Are you adding an age-banded disability plan? We offer a rate calculator for age-banded disability plans, too! Click here to learn how to set it up in your account.
Benefit plan setup
HR administrators can set up the calculator for standard rate disability plans to have coverage amounts automatically populated in the employee's self-enrollment experience and on the admin approval page. The system will calculate coverage amounts based on how you set up the disability plan.
This feature saves you time as you will not need to manually enter coverage amounts when approving your employees' benefit elections.
To start setting up the calculator, navigate to Settings > Benefits > Plans. If creating a new plan, select Create New Plan. If editing an existing plan, click on the plan name.
Step 1 (Plan Details) shows the Disability Plan Type field, which includes two options: Short Term Disability and Long Term Disability. For existing disability plans, the plan type field will be blank, but you can add in the type.
Once you finalize and save the plan settings, the Disability Plan Type field will not be editable.
In Step 2 (Coverage Options), you will need to enter specific information in order to set up the calculator for the standard rate disability plan.
First, determine how you want to have coverage amounts calculated for your employees. Choose Percentage of regular weekly (or monthly) wages* to add in a percentage. You can enter a maximum benefit amount if needed.
Next, select Standard/Composite Rate to define monthly premiums for each eligibility group in the following step (Eligibility and Cost). Clicking on the green hyperlink of "weekly wages" or "monthly wages" will bring up more information on how the calculation works.
*Short term disability plans show week/weekly while long term disability plans show month/monthly ("Percentage of regular monthly wages" and "% of employee's monthly wages").
If you choose Other or Variable Rate, the system will not be able to calculate rates without knowing how coverage amounts should be calculated. You will need to add the coverage amount for the employee when reviewing and approving their benefit elections.
During the enrollment experience, the employee will see a message on the disability plan card letting them know to refer to benefit pricing materials provided by HR. If the employee elects to enroll in the plan, their enrollment summary will show "HR Review" in the You Pay (per paycheck) column.
To avoid errors, ensure that each of your benefits-eligible employees have valid compensation data—pay schedule, pay type, pay rate, and paid per value—entered in their Compensation table. The system will not calculate the employee's rate if the necessary information is not in BambooHR, and the employee will not be able to view their calculated per-paycheck rates when electing to enroll in the disability plan. If this error occurs, you will have to manually add the rates when approving the employee's benefit elections.
The next step (Eligibility and Cost) is to determine who is eligible for the disability plan and how much the company and employee pays. In this table, add the monthly rate and the percentage of what your company pays. The value you enter in the Company Pays field will automatically calculate the value in the Employee Pays field so that the two values add up to 100%.
The formulas listed below are what the system uses to calculate rates for each employee enrolled in the disability plan.
- Short term disability: The calculator multiplies the employee’s weekly wages by the % of wages covered, divides that by 10, and then multiplies by the rate given by the carrier.
- Long term disability: The calculator multiplies the employee’s monthly wages by the % of wages covered, divides that by 100, and then multiplies by the rate given by the carrier.
For short term disability plans, the monthly rate is "per $10 of weekly coverage." For long term disability plans, the monthly rate is "per $100 of monthly coverage."
When you enter a value in the Monthly Rate field, the system will automatically update the Example box to provide you with additional details on how the calculation will work for your employees.
- Calculations will assume USD and will not work with other currencies.
- For hourly employees, calculations assume a 40-hour work week.
- If the employee's pay type is "Commission Only" or their Paid Per field states "Piece," the calculations will not work for that employee.
Employee view
After you set up a disability plan with the disability rate calculator, the benefits-eligible employee will be able to view the amount they will pay per paycheck, the percentage of weekly (or monthly) wages, and if set up, the maximum amount per week (or month) during the enrollment experience.
Admin approval
- Plans without calculator: For Other and variable rate plans, the approval page will highlight the Employee Pays and Company Pays fields, in which you need to enter rates.
- Plans with calculator: Standard/composite rate plans will have the Employee Pays and Company Pays fields automatically populated with the per-paycheck rates.
You can edit rates in the Eligibility and Cost step. Updated rates will only show in employees' enrollment experience and on the admin approval page for pending benefit elections. Approved benefit elections will not reflect the new rates. In this case, the disability plan will be like a variable rate plan with costs (rates) edited or entered manually.
If you update an employee's approved enrollment (for the disability plan) within an enrollment window, the CSV/Excel reports, PDF forms and carrier connections will reflect the updated enrollment details. However, if updating their approved enrollment via bulk enroll or the employee profile, you will need to communicate the new enrollment details with your carriers.