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Prorating Benefits
If you work for a company that prorates benefits based on the benefit start date, do you prorate based on the number of work days in the pay period or the number of calendar days in the pay period.
For example, an employee is paid biweekly and loses medical coverage so they newly enroll effective 2/1/17. The pay dates are 1/29/17 through 2/11/17. Would you charge them for 8 days of coverage or 11?
My previous 2 companies would prorate based on all 14 calendar days because they are covered on the weekends but my new company prorates based on work days. I'm just curious what others do.
I've also seen companies just charge whatever the cost is on the last day of the pay period but I'm specifically curious about companies that prorate.
Thanks!
For example, an employee is paid biweekly and loses medical coverage so they newly enroll effective 2/1/17. The pay dates are 1/29/17 through 2/11/17. Would you charge them for 8 days of coverage or 11?
My previous 2 companies would prorate based on all 14 calendar days because they are covered on the weekends but my new company prorates based on work days. I'm just curious what others do.
I've also seen companies just charge whatever the cost is on the last day of the pay period but I'm specifically curious about companies that prorate.
Thanks!
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Comments
Have to agree that we just started the full per payroll deductions as soon as they were eligible but our employer pays a large part of the employee only and some of the other groups. Because if you do a prorate on the front end, what do you do on the back end? Do you prorate out the last eligible days also? (for us as a small business, we are required to cover through the last day of any month that they work so if they pay a little more upfront, it usually works out on the back end -- they have just prepaid a bit)
Coming late to this party - sorry. We don't pro-rate; we go by the status on the last day of the pay period. If you're actively employed or covered on the last day of the pay period (such as a new hire or someone who has a QE to enroll in coverage) we charge for the entire pay period; if you're not actively employed or covered (as in someone who terms employment, retires, or has a QE to drop coverage) on the last day of the pay period you get that pay period without cost.
ETA: I truly apologize for the necropost. I incorrectly read the thread as originating last month rather than last year. Mods feel free to delete if this is a violation.
I would check to see what your vendor is doing and when benefits are actually terminating. If they are getting the whole month, the employee should pay their full portion of the month.