Delivering Insight…for a select network of health insurance agencies

Delivering Insight…for the Benefits department – as well as the CFO

Claims Positioning System (CPS):

CPS is a foundational tool to help you understand the causes and potential solutions hidden in your claims experience. We collect claims information for your medical and prescription drug plans and then process the information through our models. You can see the position of your plan’s claims relative to Milliman’s industry-leading benchmarks – helping you pinpoint any areas for improvement. After the standard reports are presented, you can build custom reports using various fields in a spreadsheet format or perform scenario testing of different plan designs.

Imagine this scenario: The Benefits department wants to offer more competitive benefit plans to attract and retain key employees and continue to fuel the company’s growth. At the same time, the Finance department and the CFO need to balance a budget that is showing annual health care trends in the 10-12% range while the budget only has room for 6-8%. Sound familiar?

Enter Milliman’s Benefits CFO as your solution. Milliman developed Benefits CFO to help both departments – we help Benefits understand the financing and costs of their strategy yet we also help Finance understand the economics of the rapidly changing healthcare environment. Both departments are essential in staying on top of the complex world of employer-sponsored health and welfare benefit plans.

There are two major platforms of services: Core (self-funded) and Fully Insured. Each can be tailored to fit all sizes and types of employers.

Key features:

•RigorousActuarialAnalysis •IndependentAdvice •NationalandInternationalCoverage •PowerfulAnalysisToolsandBenchmarkingData •DeliveredLocally •ProactiveApproachwithDedicatedStaff

…using actuarial analysis tools

...for self-funding

Self-Insured Feasiblity Analysis (SIFA):

Is self-insurance right for you? Using our proprietary actuarial cost models, we estimate the cost and volatility of health plan expenses. We calculate the actuarial cost factors for age, gender, area, plan design and coverage tier to discover the areas of greatest risk. Finally, we incorporate stop-loss funding, claims administration, and other miscellaneous factors to help you determine if self-insurance is feasible.

Comprehensive Assessment of Health Plans (CAHP):

Understanding how your healthcare plans stack up against others that are in your geographic area, within your industry, of similar employee size, and in your specific peer group is important. The Comprehensive Assessment of Health Plans allows you to visualize how competitive you are by benchmarking your specific plan designs, premium rates, and employee contributions and putting them into an easy to follow and understandable format. In addition, this report includes an actuarial analysis of your rate quotes and stop-loss contracts. An actuarial risk assessment and demographic analysis are also performed, and general recommendations are contained throughout.

…with benchmarking data

Financial Monitoring Report (FMR):

The FMR is the Benefit Manager’sownP&L.Thisprovidestheanswersto facilitate communication with participants, accounting and finance. This report combines your claims, premiums, expenses, admin. fees, and other items into one comprehensive financial report. Produced quarterly, this report turns data into information giving you a proactive financial management tool.

…totrackyourP&L…to assess the impact of M&As

Merger & Acquisition Assessment Report:

Using our extensive M&A experience, we’ve put together a package of exhibits and analyses to help you determine the effect of the M&A on your plan, particularly for due diligence. We provide a side-by-side assessment for plan design, premium, type of funding, vendors, employee contributions and stop-loss coverage, as well as a forecast of potential scenarios. Included as support are Milliman’s actuarial models for demographic analysis, pricing and plan design changes.

Incurred But Not Reported (IBNR) Reserve:

As the plan’s fiduciary, you need to maintain a documented calculation of IBNR reserves. For publiclytraded companies, Sarbanes-Oxley requirements are even more rigorous. Completed by a credentialed health actuary,ourIBNRReserveReportusesactuarially approved techniques to fulfill IRS, DOL, and SOX requirements.Providing ongoing support, we are available to discuss this report with auditors as necessary.

...for auditors and finance

Renewal Evaluation:

Our Renewal Evaluation gives you the tools toensure you receive the best renewal from your carriers. Using our proprietary actuarial models and industry knowledge, we will provide an independent calculation of your costs, including claims experience calculation, administration & retention estimates, trend analysis, manual rate calculation, plan design change relative values, stop-loss analysis, reserve estimation, and any other services listed. With this in hand, we will review the carrier’s calculations and identify any areas for discussion.

...to evaluate carrier renewals

“The stop-loss carrier for our self-funded health plans initially proposed a 25% increase to our premiums! Based on Milliman’s analysis of our claims and historical premiums, we should have been receiving a decrease. Armed with this objective detailed analysis, our consultant was able to negotiate a 37% decrease in our stop-loss premiums compared to 2012, and a difference of more than 50% from the original quote.”

~Tricia Van Zee, Director of Total Rewards & HR Shared Services, Pella Corporation

Milliman is among the world’s largest providers of actuarial and related products and services. The firm has consulting practices in healthcare, property & casualty insurance, life insurance and financial services, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information, visit milliman.com.

About Benefits CFO

Originating in Milliman’s Health & Welfare Consulting Practice in Omaha, Benefits CFO was developed in 2002 to address the needs of mid-market employers looking for more sophisticated financial and actuarial analysis. Working in conjunction with a select group of health insurance agencies, Benefits CFO offers two platforms of services that are provided continuously throughout the year. The Core platform is geared for self-insured health and welfare plans, and as the name indicates, the Fully Insured platform is for fully insured plans. In addition, we offer a number of additional services on an ad hoc basis. Consistent with Milliman’s brand of “Delivering Insight,” Benefits CFO is recognized as an industry leader in benchmarking data, actuarial analysis, and unique tools to advise our clients.