Capacity Building

Level Three: Fee for Service

Establishing a Fee for Service For Benefits Planning

The fee should include the following expenses:

Benefit Specialist (BS) Salary

(annual amount times the number of Full Time Equivalent or FTE)

BS Fringe Rate

(% of Salary times # FTE)

Travel

(amount allotted per staff time # FTE)

Management costs

(% manager’s time needed to manage this service, times salary plus fringe rate and travel)

Administrative Overhead

(% assigned by agency to this service center. Should include office space, equipment, supplies, % agency insurance, licenses, etc, and training/staff development costs, and any other agency expenses)

“Cushion”

( covers unforeseen expenses, and includes any profit sharing that is agreed-upon)

Establishing an Hourly Rate:

§  Calculate number of weeks in the year (56) minus number of weeks of leave connected to the position (ie, annual leave, sick leave, holidays). The result is then multiplied by 40 hours. This gives the total available hours of time that the BS is available to work.

§  Calculate the percentage of time that BS’s typically can spend in “billable” services, vs other activities such as training, staff meetings, doing outreach, etc (ie. 65% is what many agencies have found to be reasonable to expect). Multiply this percentage by total annual hours the BS is available to work.

§  Divide the program total cost (described above) by this number. This should give you an hourly rate.

Establishing an Outcome rate:

§  Start with the hourly rate calculated above.

§  Calculate the average number of hours that historically yield the outcome (ie average hours to provide benefits planning, including the report and reviewing the report with the consumer). Multiply the 2 numbers. This is the cost for each outcome.

Developing an Annual Contract:

§  Include the total from the calculation formula above.

§  Use the information related to hours of billable time available and average hours to provide benefits planning to establish how many “outcomes” are reasonable to expect during the year.