Affordable Care Act Increases Need for Actuarial Services……………
The Affordable Care Act (ACA) has brought unparalleld, intrusive bureaucratic oversight of employer sponsored health & welfare plans. Although the Employee Retirement Income Security Act (ERISA) was passed 44 years ago, the onus of fiduciary duties, particularly in regard to prudent management of plan assets, has become a new source of intense government focus.
ERISA imposes rigorous standards for fiduciaries—those who manage an employee health & welfare plan and its assets. Now under the ACA, plan sponsors are increasingly at risk for government audits and sanctions. Unfortunately, many employers establish self-funded employee welfare plans without being fully aware of their fiduciary responsibilities and the added pressures of the ACA.
Coverage affordability is an important requirement for ACA compliance by plan sponsors and is directly tied to the plan sponsor’s rate making. Coverage affordability relates to the maximum amount an individual must pay for single-only coverage relative to that person’s household income without triggering a penalty for the employer. Employer-sponsored coverage will be considered affordable in a plan year, if the employee’s required contribution for self-only coverage does not exceed a certain percentage set by the IRS for that plan year.
Failure to comply with affordability requirements triggers punishing government sanctions. For that reason, among others, proper rate making by the plan sponsor is a major and essential component of a health & welfare plan under the ACA.
Independent licensed actuaries provide a key component for plan sponsors’ rate making and are important resources for plan sponsors seeking to fulfill their fiduciary duties. Yet executives – who hire lawyers to review a variety of company transactions and accountants to audit their companies’ books – routinely accept cost funding analysis and projections advice from benefit consultants, brokers and insurance company representatives that all too often have not been examined by an independent, fee based actuary.
Sierra-Berkshire Associates, Inc. is a duly licensed actuarial consulting firm incorporated in 1996. Recognizing the importance of actuaries’ role in today’s regulatory environment, a number of large third party administrators and benefit consulting firms nationally have retained Sierra-Berkshire Associates as an outsourced independent actuarial resource on their clients’ self funded health & welfare plans.
Sierra-Berkshire Associates is well positioned to assist plan sponsors with affordable actuarial opinions, claim reserve needs & analysis, claims cost analysis & projections. Actuarial services for ACA compliance include plan value assessment, essential health benefits certification and minimum essential coverage certification. For public bodies and other employers whose plans include retiree Health coverage, Sierra-Berkshire Associates performs OPEB actuarial valuations of post- employment benefits for the purpose of satisfying the requirements of the Government Accounting Standards Board (GASB) Statement No. 75.
Health & Welfare Plan Actuarial Services:
- Claims Cost Analysis & Projection
- IBNR Calculation & Analysis
- ACA Essential Health Benefits Certification
- ACA Plan Actuarial Value Assessment
- ACA Minimum Essential Coverage Certification
- Retiree OPEB Liabilities Valuation
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8124 Boxberry Avenue, NV 89131 • 702-899-8201 • www.sierraberkshire.com
