As a benefits consultant, if you not employing a licensed actuary providing these services your competition will……………………………..
By Bill Rusteberg
An actuarial study should include:
- Mid-year renewal projections
- Plan design analysis
- Stop-loss analysis
Independent actuary services are a critical element forming the foundation upon which comprehensive risk management services are based within our industry. Without an actuarial analysis a plan sponsor cannot be certain recommended risk management strategies will produce anticipated results.
“Actuarial attention is directed to the following areas: (1) The benefit structure should be sound, (2) The contributions levels should be reasonable and adequate, (3) Adequate reserves should be calculated and maintained, (4) The level of self-funding should be reasonable when tested against risk theory. The role of the actuary is not promotional nor adversarial. Rather, the actuary is a presenter of facts. The facts are that self-funding financial outcomes will vary from year to year due to (1) Judgement errors, (2) secular trends, and (3) Random statistical fluctuations.” – Carlton Harker, Society of Actuaries
RiskManagers.us has been providing these services for many years. Our mid-year renewal projections are accurate to within 2-4% and always on the conservative side. Projecting future plan costs is critical to effective risk management.
The cost to perform an actuarial study is surprisingly low, but necessary in order to fulfill fiduciary duties to the highest possible degree. Yet we find many plan sponsors have never engaged an independent actuary.
Recently (last month) I even had one plan sponsor reluctantly explain why he thought an actuarial study was unnecessary. “Bill, what if the actuary tells me I am under funding the plan? I don’t want to tell my board I’m under funding because I’ve told them we are doing just fine! Besides, we don’t have any more money budgeted this year for our health insurance plan!”
His philosophy of Don’t Hire An Actuary Because You May Get Really Bad News mirrors everything else that’s wrong with health care these days. Therein lies your greatest opportunity to open doors and solve health care for prospective clients welded to the status quo.
RiskManagers.us is a specialty company in the benefits market that, while not an insurance company, works directly with health entities, medical providers, and businesses to identify and develop cost effective benefits packages, emphasizing transparency and fairness in direct reimbursement compensation methods.
The shared vision of RiskManagers.us and clients who retain our services is to establish and maintain a comprehensive employee health and welfare plan, identify cost areas that may be improved without cost shifting to any significant degree, and ensure a superior and sustained partnership with a claim administrator responsive to members needs on a level consistent with prudent business practices.
Plan costs, in all areas including fixed expenses and claims are open for review on a continuing basis. Cost effective plan administration and equitable benefit payment to providers are paramount to fulfilling our mutual fiduciary duties. As we proactively monitor and manage an entire benefit program we are open to any suggestions members may make or the dynamic health benefit market may warrant in order to accomplish these goals.
Duty of loyalty to our clients, transparency and accountability are essential to the foundation of our services. To that end, we expect our clients to realize a substantial savings based upon the services that we will deliver.
2018 RiskManagers.us All Rights Reserved
For More Information Write RiskManager@RiskManagers.us