Online Actuarial Value Calculator Updated

Issued by: Contribution Health

Date: Apr. 4, 2021

Lancaster, PA  -  Contribution Health announces the newest update to its online Actuarial Value Calculator (www.freeactuarialvalue.com)

Contribution Health actuarial research team has just published the latest version of their innovative and accurate online actuarial value calculator. 

The free online calculator is an attractive commercial alternative to the federal calculator and is available free for occasional use or on a subscription basis with enhanced features as a strategic tool for single or multi-agency organizations.  The subscription version includes save and library features, multiple users, and batch uploads.  A research version for custom modification is available through the Contribution Health consulting division.

The phrase “Actuarial Value” embedded in the 2010 Affordable Care Act raised awareness and interest in this concept.  Plans with a minimum Actuarial Value of 60% were considered sufficient to avoid penalties. Beyond any insurance reform laws, the ability for brokers and employers to easily make side-by-side comparisons of health insurance plans based on their actuarial value provides great strategic advantage for plan modeling and financial planning of employee benefit plans.

Brokers who have discovered how to use actuarial value now use it as their primary plan advisement tool.  The mathematics of actuarial value opens opportunities for brokers, advisors, employers, and even ancillary vendors such as bankers and accountants to make useful observations and advice. It’s the measure nobody else uses that can make you look smarter than the other guy. Everybody likes to look smart.

A strategic approach for a broker is to lay out all their clients into a grid, show each employer where they stand, and ask the employer where they would like to be compared to others.

Dual option and Triple option plans should be using actuarial value as the core planning tool to manage the spread of value and the contribution strategy.  Simple comparative information can immediately frame the debate for an employer in a much more meaningful way than in the past.  The first thing an employer needs to know is, “where do I sit compared to others?” Nothing could be simpler than saying, “here’s where you are, here’s where everyone else is”.

The Technology

The technology, unlike other models, presents a revolutionary approach that is based on re-pricing a “model office” of 300,000 claims per 10,000 covered participants.  The model office is based on average discounted and allowed charges in the employer sponsored market published by the Health Care Cost Institute.  HCCI research data includes over 2.5 billion medical and prescription drug claims for approximately 40 million individuals.  The model essentially runs a claim adjudication routine similar to running an actual experience claim data set to see the impact of plan changes.  Testing of the online model shows impressive correlation with the federal calculator within 1% using an array of plans, many with complex copay structures.

For further information: Melissa Wert, Manager of Data and Technology mwert@contributionhealth.com

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