Applying the Billing Wash Rule
For group benefit plans in PrismHR, the billing wash rule determines whether the system charges plan premiums and deductions for a month. This is determined based on where the coverage start or end date falls in relation to the wash rule date.
The wash rule applies to new hire and terminated employees. The following examples illustrate how the wash rules can affect the benefit deductions of new hire and terminated employees.
New Hire Employees
Scenario 1: No Wash Rule Applied
On the Benefit Plan Setup form:
| • | Use Billing Wash Rule? = Enabled |
| • | Wash Rule Date On/Before = 15th Day of the Month |
On the Employee Benefits Enrollment form:
| • | Coverage Starts = 01/08/2021 |
| • | Deduction Starts = 02/01/2021 |
Result: The system performs a benefit adjustment for the full month of January since the employee's start date (Jan 8) comes before the wash rule date (Jan 15). The system charges the employee their regular scheduled deductions.
Scenario 2: Wash Rule Applied
On the Benefit Plan Setup form:
| • | Use Billing Wash Rule? = Enabled |
| • | Wash Rule Date On/Before = 15th Day of the Month |
On the Employee Benefits Enrollment form:
| • | Coverage Starts = 01/29/2021 |
| • | Deduction Starts = 02/01/2021 |
The Deduction Starts field shows Wash Rule applied for 202101.
Result: The system does not perform a benefit adjustment for the full month of January since the employee's start date (Jan 29) comes after the wash rule date (Jan 15). The system does not charge the employee.
Terminated Employees
The following is an example of a scenario where the system does not apply the wash rule to a group benefit plan for a terminated employee.
Note: If the Coverage Ends On field is set to "End of Month Following Termination Date" and the Wash Rule date is set to "End of Month", the wash rule is not applied. However, any other Coverage Ends On Option will result in a full month's charge upon termination.
On the Benefit Plan Setup form:
| • | Use Billing Wash Rule? = Enabled |
| • | Wash Rule Date On/Before = 15th Day of the Month |
On the Employee Benefits Enrollment form:
| • | Coverage Starts = 01/22/2021 |
| • | Coverage Ends = 03/05/2021 |
| • | Deduction Starts = 02/01/2021 |
The Deduction Starts field shows Wash Rule applied for 202101.
| • | Deduction Ends = 03/05/2021 |
The Deduction Ends field shows Wash Rule applied for 202103.
Result: The system does not perform a benefit adjustment for the full month of January since the employee's start date (Jan 22) comes after the wash rule date (Jan 15). The system does not charge the employee. Since the employee was terminated on March 5th (before the 15th day of the month), the system also applies the wash rule to the full month of March.
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