Benefit innovators actuarial services and healthcare reform
- 1. Benefit Innovators, Inc. Actuarial Services Presentation
- 2. Who We Are Benefit Innovators, Inc. is an actuarial and compliance consulting company with expertise in healthcare reform, cost modeling and strategic planning for employer sponsored health benefits. We partner with employee benefit consultants, brokers and administrators that provide our services to their clients as a seamless addition to their employee talent. 2
- 3. General Information All actuarial services are performed or overseen and reviewed by a credentialed actuary (SOA and AAA) Our models and tools are all built in house, including plan design/rating model, demographic model, Pay or Play model and claim distribution model. The general process is you collect the data, we perform the work and provide it to you. You then present and use our work with your clients. 3
- 4. Actuarial Services • Strategic Planning - Plan design modeling and employee contribution analyses for fully insured or self funded plans. • Renewal Reviews • Funding Analyses for self funded groups or those considering self funding. • Pay or Play Analysis – modeling healthcare reform •COBRA rate certification of HRAs and self funded plans. • Actuarial Value calculation and Minimum Value cert. • IBNR reserve calculations 4
- 5. Strategic Planning Employers can best align their actual healthcare benefits cost with their target budget by: 1. Using an independent projection of cost for self funded or HRA cost, not relying on stop loss carrier numbers. 2. Design plans that meet goals and accurately analyze the cost impact of any plan design. This includes HRA and HSA contributions. 3. Set employee contributions appropriately to meet the net cost targets and to avoid selection issues. 5
- 6. Renewal Reviews • Renewal Review Memo – review of underwriting assumptions including trend, pool charges, credibility, etc. • Fully Insured Renewal Projection – full renewal analysis to project required increase either mid-year or at renewal for comparison to carrier’s calculations. • Self Funded Renewal Review or Renewal Projection– trend review, claims projection, model excess claims and expected premiums at varying stop loss levels, and Monte-Carlo simulation modeling to examine volatility and probability of hitting attachment point. 6
- 7. Funding Analysis For groups that are already self funded, the funding analysis is an extension of the Renewal Review Report allowing the group to determine if stop loss protection is at desired levels. For fully insured groups considering self funding the funding analysis is used to help determine if self funding is appropriate and desired. 7
- 8. Funding Analysis The report serves various functions including: -Help strategize how benefits are funded -Help determine appropriate stop loss levels if self funding is chosen -Negotiation tool for stop loss carrier quotes and renewals -Budgeting tool for groups that do end up self funding -Basis of strategic planning around plan design, employee contributions and all aspects of cost. 8
- 9. Pay or Play Analysis The Benefit Innovators Pay or Play Analysis is used to help employers to: -assess the impact of the PPACA on their healthcare benefits and cost -strategize around the changing healthcare market due to the new regulation -better understand the impact of different strategies on both their own cost and the cost to employees. 9
- 10. Pay or Play Analysis We model 4 scenarios for the 2015 calendar year when employer shared responsibility penalties begin and compare them to a baseline projection. Scenario 1 – currently offered coverage but we assume all employees that are better off going to an exchange do so. Scenario 2 – no coverage is offered to employees Scenario 3 – no coverage is offered to employees but savings from dropping coverage is used to increase salaries Scenario 4 – offer employees a minimum value plan with employee contributions set to be affordable for all employees. 10
- 11. Pay or Play Analysis Considerations in Pay or Play analyses: - cost of medical coverage - Employee contributions and affordability - out of pocket (OOP) costs - taxes including employee income tax, FICA, employer income tax - employer penalties (not tax deductible) - exchange subsidies 11
- 12. Thank You for Reviewing our Services Please feel free to contact us with any questions, to request sample reports or to discuss partnering with Benefit Innovators. Brad Vernon, FSA, MAAA [email protected] Phone: (717) 381-7194 Visit our website www.benefitinnovators.com 12