This illustration is on a 465 life case that has been on a Reference Based Pricing plan for over a decade. They have never had a rate increase.
The illustration breaks down the various cost components.
In this instance the plan is a Cash Pay Centric Plan with a Reference Based Pricing wrap.
Plan contributions are a sum of all costs distributed across participation tiers.
Plan contributions shown include a margin over expected claims. A plan sponsor may decided to fund less than the suggested funding rates especially if there are adequate booked reserves from the prior year.
Reserves should aways be a minimum of 2.5 months of paid claims. Current funding is substantially less than shown above with reserves exceeding $2,000,000.
Managing risk is an ongoing process that never stops. Sometimes plan sponsors get too comfortable, trading proactive risk management for passive and reactive risk management. Not this client
“The ability to embrace and adapt to change is key to the process. Otherwise frustration of purpose leads to mediocre underwriting results.” – Bill Rusteberg
Static risk management is contrary to proper oversight. We bring no value in exchange for the fees you pay us when the status quo isn’t continuously challenged with evolving strategies and a wiliness to act when it’s in the best interests of the plan and plan members no matter how hard change may be.
The value we bring includes years of risk management experience, contacts within our industry built on trust over time as well as our continuous commitment toward means and methods a dynamic and changing market may warrant in order to best serve our customers. Contributing these resources to achieve best results requires a receptive audience sharing the same philosophies and goals. The ability to embrace and adapt to change is key to the process. Otherwise frustration of purpose leads to mediocre results.
