Benefit Paths

Benefit Administration: This section of the Implementation Guide (IMG) is where you set the SAP Benefits Administration component. Here you enter in the system all the details of the benefit plans offered by your company. Benefit Area: Benefit areas allow you to have separate administration of different benefit plan pools. This division is primarily for administrational purposes and would not normally be used for eligibility ◊ Basic Settings ◊ Benefits ◊IMG Path: Personnel Management Define Benefit Area Assign Currency to Benefit Area: In this step, you specify the currency for the benefit area ◊IMG Path: Personnel Management Assign Currency◊ Basic Settings ◊Benefits this step, you enter the providers of the benefit plans you offer. This could be the Insurance company, or Health Maintenance Organization that receives the benefit plan costs Define◊ Basic Settings ◊ Benefits ◊IMG Path: Personnel Management Benefit Providers In this step, you set relevant benefit area for your Customizing activities If you have more than one benefit area to set up, you must set up each independently. After you have set up all the plans in one area, you must return to this view, set the next current benefit area and work through the IMG again, setting up the new benefit area. IMG Path: Personnel Set Current Benefit Area◊ Basic Settings ◊ Benefits ◊Management Benefit Plan Types: In this step, you enter the benefit plan types that you require for the plan categories predefined in the system. The following plan categories are provided by MSD: • Health Plans o Medical o Dental o Vision • Insurance Plans o Basic Life o Supplemental Life o Accidental Death & Dismember • Savings Plans o 403B o 457 o PERS (Public Employees retirement Scheme for CP Benefit Plan) & TRS (Teachers Retirement Scheme for TP Benefit Plan) • Flexible Spending Accounts o Health care o Dependent care IMG Path: Personnel Define Benefit Plan◊ Plan Attributes ◊ Basic Settings ◊ Benefits ◊ Management Types Define Benefit Plan Status: It is important that you assigning statuses in order to be able to control the availability of plans with a minimum of effort. For example, you can control whether or not employees can enroll in a plan simply by changing its status ◊IMG Path: Personnel Management Define Benefit Plan◊ Plan Attributes ◊ Basic Settings ◊ Benefits Status

Benefit Plan Status: In this step, you define parameter groups. You decide which groups you require in two stages: 1. You consider which costs, credits, coverage and employee and employer contributions for your plans vary according to the age, salary and/or seniority of employees (or possibly the age of the employee's spouse). 2. You determine the different ways in which you need to divide your employees according to different value ranges for these criteria. It is not possible to define overlaps of ranges for a criterion within a single parameter group. Therefore, if you require different employee groupings for different plans, you need to create a separate parameter group. For each unique combination of criteria and their values, you need to define a parameter group. In this step, you simply create the parameter groups to which you assign groups for the individual criteria in the following steps. You later refer to the parameter groups, where applicable, in the individual rule variants for plans. Since one parameter group can be referenced by multiple plans, Customizing effort is kept to a minimum. In the plan variant, you also have the flexibility of being able to specify that you only want to use certain criteria values belonging to a parameter group, for example, age ranges ◊ Basic Settings ◊ Benefits ◊IMG Path: Personnel Management Define Parameter◊ Define Employee Criteria Groups ◊Define Employee Groupings Groups Age Groups: In this step, you define the age groups for the parameter groups that you defined in a previous step. Depending on your needs, you may find for some parameter groups, you can leave out this step, if for example there is no requirement to differentiate between employees based on age Define◊ Basic Settings ◊ Benefits ◊IMG Path: Personnel Management Define Age◊ Define Employee Criteria Groups ◊Employee Groupings Groups Age Groups under Parameter grouping “PAR1” Cost Groupings: In the parameter group you could differentiate between employees based upon age, salary and seniority. Here you can further differentiate between employees, based on other employee criteria, such as geographical location, job classification, marital status and so on. Only set up this feature, if you find that the parameter group does not adequately cover your needs, when specifying costs for different groups of employees ◊IMG Path: Personnel Management Define Cost◊ Define Employee Groupings ◊ Basic Settings ◊Benefits Groupings Coverage Groupings: In the parameter group you could differentiate between employees based upon age, salary and seniority. Here you can further differentiate between employees, based on other employee criteria, such as geographical location, employment contract, residence status and so on. Only set up this feature, if you find that the parameter group does not adequately cover your needs, when specifying coverage for different groups of employees Define◊ Basic Settings ◊ Benefits ◊IMG Path: Personnel Management Define Coverage Groupings◊Employee Groupings Employee Contribution Groupings: In the parameter group you could differentiate between employees based upon age, salary and seniority. Here you can further differentiate between employees, based on other employee criteria, such as geographical location, weekly hours, residence status and so on. Only set up this feature, if you find that the parameter group does not adequately cover your needs, when specifying employee contribution for different groups of employees IMG Path: Personnel Define◊ Define Employee Groupings ◊ Basic Settings ◊ Benefits ◊ Management Employee Contribution Groupings

the parameter group you could differentiate between employees based upon age, salary and seniority. Here you can further differentiate between employees, based on other employee criteria, such as geographical location, weekly hours, residence status and so on. Only set up this feature, if you find that the parameter group does not adequately cover your needs, when specifying employee contribution for different groups of employees Define◊ Basic Settings ◊ Benefits ◊IMG Path: Personnel Management Define Employer Contribution Groupings◊Employee Groupings the parameter group you could differentiate between employees based upon age, salary and seniority. Here you can further differentiate between employees, based on other employee criteria, such as geographical location, weekly hours, residence status and so on. Only set up this feature, if you find that the parameter group does not adequately cover your needs, when specifying employee contribution for different groups of employees ◊ Benefits ◊IMG Path: Personnel Management Define Employer Contribution Groupings◊ Health Plans ◊Plans the parameter group you could differentiate between employees based upon age, salary and seniority. Here you can further differentiate between employees, based on other employee criteria, such as geographical location, weekly hours, residence status and so on. Only set up this feature, if you find that the parameter group does not adequately cover your needs, when specifying employee contribution for different groups of employees ◊ Benefits ◊IMG Path: Personnel Management Define Options for Health Plans◊ Health Plans ◊ Plans Dependent Coverage Options: In this step, you define the dependent coverage that are used in health plans. Define all possible variations that you need, because this view is not specific to any plan or plan option ◊IMG Path: Personnel Management Define Dependent Coverage Options◊ Health Plans ◊ Plans ◊Benefits Number of Dependents: In this step, you can restrict participation in a health plan under a dependent coverage option to certain types of dependent, as determined by the subtypes of the Family/Related Persons infotype (0021). You can also define a minimum and maximum number of persons of a particular type that can be covered. During enrollment, the system only includes those dependent coverage options in the benefit offer for which the appropriate dependents are available Health◊ Plans ◊ Benefits ◊IMG Path: Personnel Management Define Minimum and Maximum Number of Dependents◊Plans Define Cost Variants: 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 how costs vary according to: • Plan • Option • Dependent coverage • Employee data 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 2. 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 IMG Path: Define Cost◊ Health Plans ◊ Plans ◊ Benefits ◊Personnel Management Variants Cost Rules: You need to define costs for each possible combination of employee grouping in the criteria you have attributed to each variant. If you have not specified any criteria in a variant, you assign one rule only Health◊ Plans ◊ Benefits ◊IMG Path: Personnel Management Define Cost Rule◊Plans Health Plan Attributes: In this step, you bring together all the definitions relevant to the health plan that you have made in the previous steps. You assign to each health plan: • Its options • Relevant dependent coverages • The cost variants for the combination of options and dependent coverages ◊IMG Path: Personnel Management Assign Health Plan Attributes◊ Health Plans ◊ Plans ◊ Benefits Insurance Plans: In this step, you define general data for insurance plans IMG Define◊ Insurance Plans ◊ Plans ◊ Benefits ◊Path: Personnel Management Insurance Plan General Data Coverage Variants: In this step, you define coverage variants to determined which factors influence the coverage an employee is entitled to in a plan. Variants are plan-specific; each plan has its own variant(s). You do not enter any actual coverage in this step. You simply define how coverage varies according to: • Plan • Coverage option • Employee data Before you start to define coverage variants, you need to do the following: 1. Determine how often coverage varies for different coverage options. This indicates how many coverage variants you need. Note the following: • If a plan has set coverages (including salary multiples), you need a coverage variant for each. • If a plan allows employees to choose any amount of coverage within a range, you need only one coverage variant. • If a plan has options, you will need a coverage variant for each option. 2. Determine how coverage varies 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 coverage grouping to determine coverage ◊ Plans ◊ Benefits ◊IMG Path: Personnel Management ◊Insurance Plans Coverage Rules: In this step, you define the actual coverages for a plan. You need to define coverage for each possible combination of employee grouping in the criteria you have attributed to each variant. If you have not specified any criteria in a variant, you assign one rule only. Coverage can be defined as a flat amount or as a factor of salary

◊ Insurance Plans ◊ Plans ◊ Benefits ◊IMG Path: Personnel Management Define Coverage Rules Cost Variants: In this step you define cost variants to determine which factors influence the cost of an insurance 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 how costs vary according to: • Plan • Coverage option • Employee data Before you start to define cost variants, you need to do the following: 1. Determine how often cost varies for different coverage options: • If an insurance plan has set flat coverage options and flat costs, you need to define a cost variant for each flat cost. • If you have set flat coverage options and the flat costs are directly proportional to the coverage stated in the flat cost, you need only one cost variant. • If an employee can choose any amount of coverage within a range and the cost of the coverage is directly proportional to the coverage, you need only one cost variant. 2. 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 IMG Path: Define Cost◊ Insurance Plans ◊ Plans ◊ Benefits ◊Personnel Management Variants Cost Rules: You need to define costs for each possible combination of employee grouping in the criteria you have attributed to each variant. If you have not specified any criteria in a variant, you assign one rule only Insurance◊ Plans ◊ Benefits ◊IMG Path: Personnel Management Define Cost Rules◊Plans Insurance Plan Attributes: In this step, you bring together all those parts of an insurance plan, that you have already defined in the previous few steps. You define the insurance plan options, then associate to each insurance plan: • Cost variant • Coverage variant ◊ Insurance Plans ◊ Plans ◊ Benefits ◊IMG Path: Personnel Management Assign Insurance Plan Attributes Combined Coverage Limits: When you define coverages for plans such as insurance, you can set limits on the coverage amount. This is often used when the coverage is an amount dynamically calculated when the employee chooses her coverage. However these limits apply only to one plan and yet you might need to define limits which combine the coverages of more than one plan. In this chapter, you define these combined limits as follows: 1. The limit that might span 2 or more plans is reduced to a mathematical equation, where there is an amount on one side and plan coverages on the other side. The two sides of this equation are then DIVIDED BETWEEN the two views in this chapter. 2. The first view defines the limit in monetary terms which is one side of the equation. It also defines the operator (equals, is greater than, and so on). 3. The second view defines the other side of the equation in terms of the plan coverages

◊IMG Path: Personnel Management Combined◊ Combined Coverage ◊ Insurance Plans ◊ Plans ◊Benefits Coverage Combined Coverage Limit Expressions: In this step, you enter the second half of the equation, as discussed in combined coverage IMG Path: ◊ Combined Coverage ◊ Insurance Plans ◊ Plans ◊ Benefits ◊Personnel Management Define Combined Coverage Limit Expressions Imputed Income for Selected Benefits: In this section of the IMG, you define the criteria needed to calculate Imputed Income. Imputed Income is based upon benefits paid for by the employer and calculated using rates set by the Internal Revenue Service (IRS). This value is then treated as taxable income for the employee IMG Combined◊ Insurance Plans ◊ Plans ◊ Benefits ◊Path: Personnel Management Review Age Groups for Imputed Income◊Coverage Review Calculation Factors for Imputed Income: In this step, you check that the Imputed Income Rate Table entries are correct. The imputed income age groups are associated with the rates/factors set by the IRS ◊IMG Path: Personnel Management Review Calculation◊ Combined Coverage ◊ Insurance Plans ◊ Plans ◊Benefits Factors for Imputed Income Savings Plans: In this step, you define general data for savings plans. You have defined the relevant type, status, and provider for each plan in the Basic Settings section of the Benefits IMG ◊ Savings Plans ◊ Plans ◊ Benefits ◊IMG Path: Personnel Management Define Savings Plan General Data Employee Contribution Variants: In this step you define employee contribution variants to determine which factors influence the permitted employee contribution to a plan. Variants are plan-specific; each plan has its own variant(s). You do not enter any actual contributions in this step. You simply define how contributions vary according to: • Plan • Option (only for plans in the plan category Miscellaneous) • Employee data Before you start to define variants, you need to do the following: 1. Determine how often employee contributions vary for plans and any plan options. This indicates how many contribution variants you need. 2. Determine how employee contributions 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 employee contribution grouping to determine employee contribution IMG Path: Define Employee◊ Savings Plans ◊ Plans ◊ Benefits ◊Personnel Management Contribution Variants Employee Contribution Rules: In this step, you define the employee contribution limits for each plan. You need to define employee contributions limits for each possible combination of employee grouping in the criteria you have attributed to each variant. If you have not specified any criteria in a variant, you assign one rule only. You can define minimum and maximum employee contribution in the following ways: • As a fixed amount

• As a percentage of salary • As a contribution unit In Payroll, the total employee contribution is the sum of these amounts IMG Path: Define Employee◊ Savings Plans ◊ Plans ◊ Benefits ◊Personnel Management Contribution Rules Employer Contribution Variants: In this step you define employer contribution variants to determine which factors influence the contribution the employer makes to a plan. Variants are plan-specific; each plan has its own variant(s). You do not enter any actual contribution in this step. You only define how contributions vary according to: • Plan • Option (only for plans in the plan category Miscellaneous) • Employee data Before you start to define variants, you need to do the following: 1. Determine how often employee contributions vary for plans and any plan options. This indicates how many contribution variants you need. 2. Determine how employee contributions 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 employer contribution grouping to determine employer contribution IMG Path: Personnel Define Employer Contribution◊ Savings Plans ◊ Plans ◊ Benefits ◊ Management Variants Employer Contribution Rules: In this step, you define limits for the contributions made by the employer to employee plans. You so this for each employer contribution variant for each plan. You need to define employer contributions limits for each possible combination of employee grouping in the criteria you have attributed to each variant. If you have not specified any criteria in a variant, you assign one rule only. You can define the employer contribution and the contribution limit in either of the following ways: • As a fixed amount / as an amount per unit contributed by the employee • As a percentage of employee base salary or employee contribution IMG Path: Define Employer◊ Savings Plans ◊ Plans ◊ Benefits ◊Personnel Management Contribution Rules Assign Savings Plan Attributes: In this step, you complete the definition of savings plans by bringing together the relevant elements that you have already defined: • EE contribution variant • ER contribution variant ◊ Plans ◊ Benefits ◊IMG Path: Personnel Management Assign Savings Plan Attributes◊Savings Plans Flexible Spending Accounts (FSAs): In this step, you define general data for flexible spending accounts (FSAs). Requirements You have created the appropriate plan type , plan status, and benefit provider in the preceding steps IMG Path: Personnel Define◊ Flexible Spending Accounts (FSAs) ◊ Plans ◊ Benefits ◊ Management Spending Account General Data Assign Spending Account Attributes: In this step, you enter the details of your flexible spending accounts including contribution limits, an employer contribution variant (if required), and rules for the reimbursement of claims

Benefits◊IMG Path: Personnel Management Assign Spending Account◊ Flexible Spending Accounts (FSAs) ◊ Plans ◊ Attributes Flexible Administration: In this chapter, you define the flexible aspects of your Benefits administration. You define the availability of plans to your employees, in terms of the plans themselves. You also define aspects of the enrollment process. you enter parameters that apply to processing within an entire benefits area, including: • Open enrollment period dates • Default validity dates for adjustment/standard plan records • Advance availability of future plans • Dependent age limits ◊ Flexible Administration ◊ Benefits ◊IMG Path: Personnel Management Define Administrative Parameters Benefit Adjustment Groupings: In this step, you define adjustment groupings. These groupings allow you to specify different adjustment permissions for different groups of employees IMG Benefits◊ Flexible Administration ◊ Benefits ◊Path: Personnel Management Define Benefit Adjustment Groupings◊Adjustment Reasons Benefit Adjustment Reasons: In this step, you define adjustment reasons to control changes to employee enrollments according to company policy. The adjustment reason types that you define here are assigned as subtypes of Adjustment Reasons records (infotype 0378) in HR Master Data. Since a record can only have one subtype, a new record must be created for every adjustment reason an employee experiences. According to the adjustment concept, an employee can only make changes to her enrollments if she has an Adjustment Reasons record (infotype 0378) with the required adjustment reason as a subtype. The only exceptions to this are if changes are made during an open enrollment period or if an anytime adjustment reason is assigned to the plan type. In addition to defining adjustment reasons for certain events that can trigger changes, you may also want to define a special adjustment reason to allow changes to plans at any time ◊ Flexible Administration ◊ Benefits ◊IMG Path: Personnel Management Define Benefit Adjustment Reasons◊Benefits Adjustment Reasons Adjustment Permissions: In this section, you assign adjustment permissions to each benefit plan type for an adjustment reason and any adjustment grouping that you have defined. Note that the elements for which you can define permissions are automatically determined by the system, dependent on the plan category Health Plans: In this step, you define the changes permitted for all plans of this type. You do this for each combination of adjustment reason, adjustment grouping, and plan type ◊ Benefits ◊IMG Path: Personnel Management Define Adjustment◊ Benefits Adjustment Reasons ◊Flexible Administration Health Plans◊Permissions this step, you define the changes permitted for all plans of this type. You do this for each combination of adjustment reason, adjustment grouping, and plan type ◊IMG Path: Personnel Management Define◊ Benefits Adjustment Reasons ◊ Flexible Administration ◊Benefits Insurance Plans◊Adjustment Permissions Savings Plans: In this step, you define the changes permitted for all plans of this type. You do this for each

combination of adjustment reason, adjustment grouping, and plan type IMG Benefits◊ Flexible Administration ◊ Benefits ◊Path: Personnel Management Savings Plans◊ Define Adjustment Permissions ◊Adjustment Reasons Spending Accounts: In this step, you define the changes permitted for all plans of this type. You do this for each combination of adjustment reason, adjustment grouping, and plan type ◊ Benefits ◊IMG Path: Personnel Management Define Adjustment◊ Benefits Adjustment Reasons ◊Flexible Administration Spending Account◊Permissions Programs: In this section of the IMG, you define benefit programs and the eligibility restrictions and termination conditions for the plans within these programs. Within a program, eligibility for plans can be determined on two levels: • Program groupings control eligibility on a high level (macro-eligibility) by allocating an employee a defined program, depending on his/her organizational and employment data. • Eligibility rules are optional and control eligibility on a low level (micro-eligibility) by determining whether an employee can participate in a plan within the relevant program. An employee must fulfill the conditions defined in the rule in order to be able to enroll. Eligibility rules are assigned to plans in programs by means of an eligibility variant. First Program Grouping: In this step, you define first program groupings. Later, you define programs for a combination of first and second program groupings. Identical attributes are available for the setup of both the first and second program groupings, and they are therefore interchangeable. The fact that you determine macro-eligibility for a program using two dimensions means that you are able to make finer distinctions between groups of employees IMG Path: Personnel Define First◊ Programs ◊ Flexible Administration ◊ Benefits ◊Management Program Grouping Second Program Grouping: In this step, you define second program groupings. Later, you define programs for a combination of first and second program groupings. Identical attributes are available for the setup of both the first and second program groupings, and they are therefore interchangeable. The fact that you determine macro-eligibility for a program using two dimensions means that you are able to make finer distinctions between groups of employees Flexible◊ Benefits ◊IMG Path: Personnel Management Define Second Program Grouping◊ Programs ◊Administration Employee Eligibility: In this section of the IMG, you define the criteria according to which you control eligibility for individual benefit plans within a benefits program (definition of micro-eligibility). You perform the following steps to set up eligiblity requirements: • You define eligibility grouping to identify groups of employees for whom certain eligibility criteria apply. • You create eligibility variants, which you later use to link eligibility rules to programs. • If necessary, you define dynamic eligibility conditions relating specifically to actual hours worked/length of service, or zip codes. • You bring your definitions together in the eligibility rule, where you can also specify further conditions for enrollment. IMG Path: Employee◊ Programs ◊ Flexible Administration ◊ Benefits ◊Personnel Management Define Eligibility Groupings◊Eligibility

Eligibility Variants: In this step, you define eligibility variants. These consist simply of an identifier and a description Flexible◊ Benefits ◊IMG Path: Personnel Management Define Eligibility◊ Employee Eligibility ◊ Programs ◊Administration Variants Eligibility Rules: In this step, you define eligibility rules for the benefit plans offered by your organization. You define these rules for combinations of eligibility grouping and eligibility variant, thereby determining the eligibility conditions that will apply for different groups of employees Flexible◊ Benefits ◊IMG Path: Personnel Management Define Eligibility◊ Employee Eligibility ◊ Programs ◊Administration Rules Participation Termination: In this section of the implementation guide you define criteria for the termination of benefit plans Termination Groupings: In this section of the implementation guide you define criteria for the termination of benefit plans IMG Path: ◊ Programs ◊ Flexible Administration ◊ Benefits ◊Personnel Management Define Termination Groupings◊Participation Termination Termination Variants: In this step, you define termination variants. These consist simply of an identifier and a description ◊IMG Path: Personnel Management ◊ Participation Termination ◊ Programs ◊ Flexible Administration ◊Benefits Define Termination Variants Termination Rules: In this step, you define termination rules. You define these rules for every combination of termination grouping and termination variant, thereby determining the coverage continuation periods and termination day that will apply for different groups of employees Flexible◊ Benefits ◊IMG Path: Personnel Management Define Termination◊ Participation Termination ◊ Programs ◊Administration Rules Define Benefit Programs: In this step, you define termination rules. You define these rules for every combination of termination grouping and termination variant, thereby determining the coverage continuation periods and termination day that will apply for different groups of employees IMG ◊ Programs ◊ Flexible Administration ◊ Benefits ◊Path: Personnel Management Define Benefit Programs Dependent/Beneficiary Eligibility: In this step, you define family member groupings and determine how family members are allocated to these groupings ◊ Benefits ◊IMG Path: Personnel Management Define Family◊ Dependent/Beneficiary Eligibility ◊Flexible Administration Member Groupings Dependent Eligibility Rule Variants: In this step, you define the dependent eligibility variants to which you want to assign dependent eligibility rules. You also specify whether you wish to use a family member grouping in the associated eligibility rule to restrict eligibility to types of family members with certain characteristics ◊IMG Path: Personnel Management Define◊ Dependent/Beneficiary Eligibility ◊ Flexible Administration ◊Benefits Dependent Eligibility Rule Variants Dependent Eligibility Rules: In this step, you define dependent eligibility rules to determine which types of family member are eligible as dependents. You then assign your rules to the appropriate plans by means of a rule

variant in the step Assign Eligibility Rule Variant to Plan Flexible Administration◊ Benefits ◊IMG Path: Personnel Management Define Dependent Eligibility◊ Dependent/Beneficiary Eligibility ◊ Rules Beneficiary Eligibility Rule Variants: In this step, you define the beneficiary eligibility variants to which you assign beneficiary eligibility rules in the next step. You also specify the following: • Whether you want to use a family member grouping in the associated eligibility rule to restrict eligibility to types of family members with certain characteristics • Whether the following apply for plans to which the variant is assigned: The employee can be a beneficiary♣ Contingency♣ beneficiaries can be named Spouse approval is required if beneficiaries♣ other than the spouse are to be amed (the system only takes this setting into consideration for plans of the category avings) IMG Path: Personnel Dependent/Beneficiary◊ Flexible Administration ◊ Benefits ◊Management Define Beneficiary Eligibility Rule Variants◊Eligibility Beneficiary Eligibility Rules: In this step, you define beneficiary eligibility rules to determine which types of family member are eligible as beneficiaries. You then assign your rules to the appropriate plans by means of a rule variant in the step Assign Eligibility Rule Variant to Plan IMG Path: Personnel Dependent/Beneficiary◊ Flexible Administration ◊ Benefits ◊Management Define Beneficiary Eligibility Rules◊Eligibility Assign Eligibility Rule Variant to Plan: In this step, you assign dependent eligibility variants and beneficiary eligibility variants to plans, thereby assigning the eligibility rules associated with these variants ◊IMG Path: Personnel Management Assign◊ Dependent/Beneficiary Eligibility ◊ Flexible Administration ◊Benefits Eligibility Rule Variant to Plan COBRA Plans: In this step, you specify which health plans that you have already defined in the system are COBRA-relevant. When a clerk collects COBRA-qualified beneficiaries, the system only considers employee enrollments in the plans you select here as legitimate cases where COBRA must be offered to the employee IMG Path: Choose COBRA Plans◊ COBRA ◊ Benefits ◊Personnel Management this step, you determine for which flexible spending accounts (FSAs) you will offer continuation of coverage under COBRA. You need to do this for each benefit area separately Choose◊ COBRA ◊ Benefits ◊IMG Path: Personnel Management COBRA Spending Accounts Qualifying Event Coverage Periods: In this step, you define the events that qualify individuals for COBRA coverage, and the periods of permitted coverage continuation for each qualifying event type. COBRA legislation states the following regarding coverage continuation periods: • In the case of Termination of employment and Reduction in working hours, only 18 months coverage must be provided. If qualified beneficiaries are determined to be disabled within 60 days of the COBRA event, they are entitled to a further 11 months of coverage, as are the other qualified beneficiaries who experienced the original event. • For all other qualifying events except Bankruptcy of employer, a qualified beneficiary is entitled

to 36 months continuation coverage, and there is no extension provision for disability. • In the case of the event Bankruptcy of employer, the coverage continuation period is the life of the retired employee or retired employee's widow/widower. You therefore do not need to define a continuation period in this case. Define◊ COBRA ◊ Benefits ◊IMG Path: Personnel Management Qualifying Event Coverage Periods Assign COBRA Events to Personnel Actions: In this step, you define how the system recognizes COBRA-qualifying events from employee personnel actions (infotype 0000) records. You do this by creating a link between the two. The only COBRA-qualifying event types that you assign to personnel actions are: • Termination • Death of employee • Reduction in hours You need to assign these COBRA-qualifying event types since they are based on customizable entries in your HR master data and therefore cannot be delivered as standard. When the system collects COBRA-qualified beneficiaries, it considers employee records within the date range you specify in two stages as follows: 1. The system searches for employee personnel action (infotype 0000) records. The COBRA qualifying events assigned to any personnel actions found are collected. 2. The system checks other employee infotype records for specific information which corresponds to COBRA-qualifying event types ◊ Benefits ◊IMG Path: Personnel Management Assign COBRA Events to Personnel Actions◊ COBRA Notification and Payment Intervals: In this step, you define details of COBRA administration for those states where state law concerning COBRA differs from federal law. Federal regulations are reflected in the state settings for the District of Columbia, which is also the system default. If you must comply with state regulations that differ from the federal regulations, you should create a new state entry. Otherwise, you can use the DC version for all employees, regardless of which state they reside in ◊ Benefits ◊IMG Path: Personnel Management Define Notification and Payment Intervals◊ COBRA