HCM Localization United Arab Emirates and Kingdom of

Saudi Arabia
Health Insurance

Globalization Services
 Chapter 2:
Health Insurance (Benefits)

 In this chapter, you learn about necessary steps to configure health insurance
calculation in payroll.

Process Functionality
Customizing Benefits Basic Settings
Plan Attributes
Define Employee Groupings
Health Plans
Flexible Administration
Define Wage Types for Benefit Plans
Assign Deduction Models
Assign Wage Type to Health Plan
Master Data General Benefits Information
Enrollment
Health Plans
Overwrite Default Cost of Health Plan
Payroll Calculate Health Insurance Cost According to Payment Model

© SAP 2009 / Page 2

 Customizing
Benefits Basic Settings

 The configuration was based on a general use case in KSA/UAE.

Company A has two 2 health plans（2 policies):

•Policy No. 226-AYH-2010 (valid from 1/1/2010 to 31/12/9999)
-Insurance company: NCCI Insurance
-Coverage for all employee dependents
-Classes:
Class VIP -EE contribution 0% -ER contribution 100% - Job Grade 12 and above
Class A - EE contribution 20%-ER contribution 80% - Job Grades 11 to 10
Class B - EE contribution 10%-ER contribution 90% - Job Grades 9 to 8

Assume: Cost deducted quarterly, Base amount 1000 AED;

•Policy No. 345-XCV-2010 (valid from 1/9/2009 to 31/12/9999)

-Insurance company: ACE Insurance
-Coverage up to max. of 3 dependents (kids up to 18 years are only covered)
-Classes:
Class 3 - EE contribution 20% -ER contribution 80% - Job Grade 7 to 5
Class 4 - EE contribution 20%-ER contribution 80% - Job Grades 4
Class 5 - EE contribution 10%-ER contribution 90% - Job Grades 3 and below

Assume: Cost deducted monthly, Base amount 1000 AED;

© SAP 2009 / Page 3

 Customizing
Benefits Basic Settings

UAE/KSA: Benefits Basic Settings

IMG Path: Personnel Management->Benefits

Requirement:
In this step, you define
benefit areas and specify
the currency for
corresponding benefit - Maintain default benefit - Define Benefit Area
areas. area in feature BAREA.

You also maintain default

benefit area in feature
which will be used in
master data.
- Assign Currency to Benefit Area

© SAP 2009 / Page 4

 Customizing
Benefits Basic Settings
Take UAE as an example

- Define Benefit Providers

Requirement:
You enter the providers
of the benefit plans you
offer.
You set the relevant
benefit area for your
Customizing activities.
- Set Current Benefit Area

If you have more than one benefit area to set up, you must set up each
separately. After you have set up all the plans in one area, you should switch
the benefit area in this step and work through the IMG again, making
settings for the new benefit area.
© SAP 2009 / Page 5
 Customizing
Plan Attributes
UAE/KSA: Define Plan Attributes

Requirement:
You enter the benefit
plan types that you
require for the plan - Define Benefit Plan Types
categories predefined
in the system.
You also define the
plan status that you
require for benefits
administration. You
later assign these
Here we define plan with category “A "which means “health plans”
statuses as to your
plans in their general
- Define Benefit Plan Status
data.

© SAP 2009 / Page 6

 Customizing
Define Employee Groupings
UAE/KSA: Define Employee Groupings
IMG Path: Personnel Management->Benefits

Requirement:
You define cost groupings
and determine how
employees are allocated to - Define Benefit Plan Types
these groupings. You only
need to do this if you want - Define Cost Groupings
to differentiate between
costs for employees using
additional criteria to those
available in the cost
variant(age, salary,
seniority).
Here we would like to use
job grade as criteria. Then we need Maintain feature CSTV1 where we can link
employee job grade with different cost groupings;
However before that, we need to make sure corresponding job
grades have been defined in system.

© SAP 2009 / Page 7

 Customizing
Define Employee Groupings
UAE/KSA: Job Grade Definition
IMG Path: PM->PA->Payroll Data->Basic Pay

Requirement:
Here we use pay scale
types to define job
grades.

- Check Pay Scale Type - Check Pay Scale Area

UAE

KSA

© SAP 2009 / Page 8

 Customizing
Define Employee Groupings
UAE/KSA: Job Grade Definition
IMG Path: PM->PA->Payroll Data->Basic Pay

- Revise pay scale groups and levels

Requirement:
UAE
Here you would like to
enter wage types in the
Basic Pay info type
(0008) which should be KSA
valuated indirectly using
the pay scale - Maintain feature CSTV1: Cost Grouping
groups/levels;
You also link employee
job grade with different
cost groupings;

KSA UAE
© SAP 2009 / Page 9
 Customizing
Health Plans
UAE/KSA: Health Plans
IMG Path: Personnel Management->Benefits->Plans

Requirement:
Here you define the
details of your health
plans. You define
different options within a
health plan and possible
dependent coverage for - Define Health Plan General Data
health plans.
You define how costs
may vary for different
employees depending
on their personal data,
and you define the
actual costs for these
various groups of
employees.

UAE KSA
© SAP 2009 / Page 10
 Customizing
Health Plans
UAE/KSA: Health Plans
IMG Path: Personnel Management->Benefits->Plans->Health Plans

- Define Options for Health Plan

Requirement:
You define the options
of your health plans, KSA UAE
consisting initially of a
description only. - Define Dependent Coverage Options

You define the

dependent coverage
that you require for all
- Define Minimum and Maximum Number of Dependents
health plans and plan
options and restrict
participation in a
health plan under a UAE KSA
dependent coverage
option to certain types Here you can configure according to your real business needs. you can restrict participation
in a health plan under a dependent coverage option to certain types of dependent, as
of dependent. determined by the subtypes of the Family/Related Persons info type (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
© SAP 2009 / Page 11
 Customizing
Health Plans
UAE/KSA: Health Plans
IMG Path: Personnel Management->Benefits->Plans->Health Plans

- Define Cost Variants

Requirement:
You define cost
variants to determine
which factors We provide a exceptional
influence the cost of a cost rule EXCR where
UAE employer will cover 100%
health plan for an plan cost
- Define Cost Rules
employee.
You use cost rules to
define the actual costs
for a health plan. You
do this for each cost
variant for each plan.
UAE

© SAP 2009 / Page 12

 Customizing
Health Plans
UAE/KSA: Health Plans
IMG Path: Personnel Management->Benefits->Plans->Health Plans

- Assign Health Plan Attributes

Requirement:
You bring together all the
definitions relevant to the UAE
health plan that you have
made in the previous steps.
You assign to each health
plan:
- Its options
- Its dependent coverage
- The cost variants for the
combination of options and
dependent coverage

KSA

© SAP 2009 / Page 13

 Customizing
Flexible Administration
UAE/KSA: Flexible Administration
IMG Path: Personnel Management->Benefits->Flexible Administration

Requirement:
You define the flexible
aspects of your
Benefits
administration .

In this step, you enter

parameters that apply
to processing within
an entire benefits area. - Define Administrative Parameters UAE

© SAP 2009 / Page 14

 Customizing
Flexible Administration
UAE/KSA: Flexible Administration
IMG Path: Personnel Management->Benefits->Flexible Administration

- Define First Program Grouping

Requirement:
You define first and
second program
groupings. Later, you
Maintain feature BENGR for default value in IT 171.
define programs for a
combination of first and
second program
groupings.
- Define Second Program Grouping
You also set the default
value for info type
171(General Benefits
Information) via
Maintain feature BSTAT for default value in IT 171.
corresponding features.

© SAP 2009 / Page 15

 Customizing
Flexible Administration
UAE/KSA: Flexible Administration
IMG Path: Personnel Management->Benefits->Flexible Administration

Maintain feature ELIGR for default value

- Define Eligibility Groupings
Requirement:
You define benefit
programs for Here you can set different eligibility criteria for employees
combinations of first within a benefit program. You later define the eligibility rule
program grouping and for combinations of eligibility variant and grouping.

second program Even if you do not want to differentiate between employees

groupings. For each within one benefit program, you must still define one
program, you list the eligibility grouping.

benefit plans in which a - Define Eligibility Variants

member of a both
program groupings can
participate if they fulfill - Define Benefit Programs
the eligibility
requirements associated
with the plan.

© SAP 2009 / Page 16

 Customizing
Flexible Administration
UAE/KSA: Dependent/Beneficiary Eligibility
IMG Path: Personnel Management->Benefits->Flexible Administration

- Define Family Member Groupings

Requirement:
You define dependent
eligibility rules to
determine which types of - Define Dependent Eligibility Rule Variants
family member are
eligible as dependents.
You then assign your
rules to the appropriate - Dependent Eligibility Rules
plans .

- Assign Eligibility Rule Variant to Plan

© SAP 2009 / Page 17

 Customizing
Flexible Administration
UAE/KSA: Standard Selections
IMG Path: Personnel Management->Benefits->Flexible Administration

Requirement:
You define default and
automatic plans for your - Define Standard Health Selections
benefit programs. You
select plans from your
programs and define The standard selections will
them as default or be used in enrollment
automatic plans with
fixed parameters.
UAE

© SAP 2009 / Page 18x

 Customizing
Define Wage Types for Benefit Plans
UAE/KSA: Define Wage Types for Benefit Plans
IMG Path: Payroll UAE/KSA->Benefits

Requirement:
In this step you
determine the wage
types relevant for the UAE
- Define Wage Types for Benefit Plans
processing of your
benefits plans in payroll.

© SAP 2009 / Page 19x

 Customizing
Assign Deduction Models
UAE/KSA: Assign Deduction Models
IMG Path: Payroll UAE/KSA->Benefits

Requirement:
In this step you assign
deduction models to benefit - Assign Deduction Models
plans. UAE
Every normal payroll run
processes benefit plan Deduction Model Configuration
payments and deductions at IMG:PM->PA->Payroll Data->Recurring Payments and deductions->Payment Model
every payroll period.
However if you have plans
where deductions for some
employees are not - Define periodicities
processed in every payroll
period, you must assign a
deduction model to the plan
and specify for which
employees this is valid.
Here we need to set up
deduction model to deduct
cost quarterly.

© SAP 2009 / Page 20x

 Customizing
Assign Deduction Models
UAE/KSA: Assign Deduction Models
IMG:PM->PA->Payroll Data->Recurring Payments and deductions->Payment Model

- Define periodicities
Requirement:
In this step you define
the periodicities of - Define deduction periods periodicities - Define employee groups

your payment models

and assign the
appropriate deduction
periods to the payment
models. You determine
in which periods the
deductions are made
for each payment
- Specify default values
model.
You define the
employee groups that
are assigned the same
payment model.

© SAP 2009 / Page 21x

 Customizing
Assign Wage Type to Health Plan
UAE/KSA: Assign Wage Type to Health Plan
IMG Path: Payroll UAE/KSA->Benefits

- Assign Wage Type to Health Plan

Requirement:
In this Customizing
UAE
activity, you can
assign a wage type to
a health plan. You can
also assign one wage
type to multiple health KSA
plans. The amount of
the assigned wage
type is used to M470 is provided as a model wage type to overwrite EE cost for health plan.
overwrite employees’
standard contribution To overwrite the default EE/ER cost calculated by system, you can input the
specific wage type in info type 0014 with the amount you would like to have for
to the health plans. EE cost, then it will overwrite the default EE cost.

The ER cost will be adjusted accordingly to keep the total contribution value
unchanged.

© SAP 2009 / Page 22x

 Master Data
General Benefits Information
Maintain infotype 0171 “General Benefits Information”

Requirement:
Infotype 0171 need to
be maintained before
enrollment.

The default value comes from features BAREA,BENGR and BSTAT;

When Click “SAVE” button, you will automatically enter in to the enrollment screen, it’s
the same as you use transaction “HRBEN0001” to directly enter into the enrollment
screen.

© SAP 2009 / Page 23

 Master Data
Enrollment
Enrollment
Via Infotype 0171 or transaction HRBEN0001

Requirement: Here double click default

offer, you can find the plan
you set as default offer in
previous customizing.

Click the plan to view the

option and dependents
and then click “Accept”
button.

Only eligible dependent

can be selected otherwise
there’ll be a red icon
besides the dependent.

E.g. you have set in the

eligibility rule that child
must less than 18 year
old, then here for a 20
years old child, there will
be a red icon here and
you can’t select.

© SAP 2009 / Page 24

 Master Data
Enrollment
Enrollment
Via Infotype 0171 or transaction HRBEN0001

Requirement:
Choose a health plan
and do the
enrollment to create
health plan data in
infotype 0167.

After click Accept button, you can press the enrollment button.

After a successful enrollment, there’ll be a new entry created in

infotype167- Health Plans.

© SAP 2009 / Page 25

 Master Data
Health Plans
Infotype 0167 “Health Plans”

Requirement:
After successful
enrollment, Infotype
0167 has been
created where stores
all information for
corresponding health
plan.

It’s also possible to change

the default plan options
here, then cost will be
adjusted accordingly.

© SAP 2009 / Page 26

 Master Data
Overwrite Default Cost of Health Plan
Overwrite Default Cost of Health Plan

Requirement:
It shall be possible to
In info type 0014 enter wage type
overwrite the M470 with amount 150 AED which
employee cost for means EE cost will be adjust to
health plan in 150 AED;
exception cases.
Once the employee
cost has been
adjusted, the
employer cost shall
After that , go to info type 0167, the
be adjusted cost will be re-calculated; EE cost
automatically was adjusted to 150 AED, ER cost
according to the total was adjusted to 850 AED to keep
total cost unchanged.
cost.

© SAP 2009 / Page 27

 Payroll
Calculate Health Insurance Cost According to Payment Model

Affected parts in payroll

Requirement:
Health Insurance cost
should be calculated Period:2011/01

in payroll according to
payment model. In this
case , the payment
model is to deducted Payroll function P0167 will calculate health
plan cost and store in corresponding wage
quarterly and in the
types customized in V_5UBA_WT
first month of the
quarter.
With Rule AE26, EE cost will be
cumulated to total EE SI cost /261.

Result table of one payroll run. You can see EE and ER cost generated with the
total cost for the quarter.

© SAP 2009 / Page 28

 Payroll
Calculate Health Insurance Cost According to Payment Model

Affected parts in payroll

Requirement:
Health Insurance cost
should be calculated
in payroll according to Period:2011/02
payment model. In this
case , the payment
model is to deducted
quarterly and in the
first month of the
quarter.

Period:2011/03

Run payroll for next two month, there’ll be no deduction according to the
deduction model.

© SAP 2009 / Page 29