A. IND
th Plans (AAHP) et, NW, Suite 600
Washington, DC 20036-3421
inistration (HCFA) alth and Human Services
Baltimore, MD 21207-0519
atistics ance Association of America (HIAA)
st
(202)824-1600
ch
ssociation of Insurance Commissioners st
(202)624-7790
Contact: Marcia A. Marshall, Health Analyst th
health condition. The FMLA applies to companies with more than 50 employees.
The Health Maintenance Organization Act of 1973 gave formal recognition to the HMO concept.
It encouraged and exerted some control over the development of the a
to the HMO Act in 1988 in response to the changing marketplace.
As always, desired profit levels will effect premium prices as well. T d
m
5. INDU
USTRY RELATIONS
American Association of Heal 1129 20th Stre
202.778.3200
Health Care Financing Adm Department of He
Attention: HCFA-1906-P P.O. Box 26676
Contacts: Maria Diacoganis and Helen Lazenby, st Health Insur
555 13th Street, Northwe Suite 600E
Washington, DC 20004
Contacts: Tom Musco and William Wellar, Resear National A
444 N. Capitol Street, Northwe Suite 701
Washington, DC 20001-1512
B. CU
However, this information is not very etailed. Both surveys have data for 1998 with regard to the average premium by plan type. This
hese companies do not produce an index or weighted time series data. In addition, the data
It is not known under which company name the survey will be produced in the future.
C. LI PROBLEMS
There is no known litigation at this time.
D. SE
olicy from dard throughout the industry (i.e. a policy that is a group medical service plan HMO at one company would be
the same name at another company).
E. CH
anaged care and fee-for-service medical service lans, represent comprehensive medical service plan products. These plans provide coverage for
s are sold separately and are not included as part of a
omprehensive medical service plan. For code 004, indicate the type of supplemental Medicare
, which are pically sold separately. Tandem plans are not limited to the combination of dental and vision
odes 009-017 represent the primary types of accident and health insurance policies. For olicy.
RRENTLY AVAILABLE PRICE DATA
KPMG and Mercer, both consulting firms, currently provide premium price information for medical service plans and accident and health insurance.
d
information is further divided into geographic regions.
T
collected is not based on a constant service specification.
TIGATION AND OTHER COOPERATIVE
RVICE IDENTIFICATION
The distinctions between the different medical service plans and accident and health insurance products seem to be clear enough as to not cause any identification problems. Each type of p has some characteristic (purpose, method of payment, set of benefits, etc.) that sets it apart the others. Also, policy terminology and certain characteristics are stan
considered the same policy with ECKLIST CLARIFICATIONS
Type of service (group 01) – Codes 001 – 002, m p
many services.
Codes 003 – 006, dental, supplemental Medicare, vision, and prescription drug plans, represent
“stand-alone” policies. These plan c
plan selected (i.e. Medigap, etc.).
Code 007, tandem plans, refers to plans that include multiple types of insurance included in a single plan. For example, many tandem plans include benefits for dental and vision
ty
insurance. Enter the types of coverage provided by the tandem plan for code 007.
C
specified disease policies, indicate the disease covered by the selected p Codes 018-021 represent the third party administrative services plans.
Service identification (group 02) – For code 001, enter the number and name of the selected policy. Many companies will name the policies to distinguish the different variations of policies offered by the company. If the company uses enrollment codes, enter the code for the selected
or anniversary date (code 003), enter the date on which the policy is renewed each year. This
If the selected policy is provided by a company that is a member of a cluster, identify that
d only ty. These policyholders are charged a regional rate based on the cations of its various facilities. Code these policies as “regional” policies, code 002. See
omments. For sample units in strata MO that earn revenue in multiple states, this will be the
5, codes 001-005) – Insurance companies generally have up to four rating ers (i.e. single, family, etc.) for the policies they sell. Indicate the appropriate number of tiers for
ry for rate determination, disaggregate to a specific census class to represent the entire policy. Please
ge at issue (group 07, code 003) - For the chosen policy, enter the policyholder’s age at the time
4-007) – This refers to the general level of health of the dividual insured. If the sample unit uses terminology for health rating other than that provided,
icyholder does not currently smoke, but as in the past,this is to be captured for “other” (code 010). For example, if the policyholder has
roup size (group 09, code 001) – Enter the total number of person covered by the selected policy for code 002.
F
will determine the repricing schedule for the given quote.
company in code 004.
Policy scope (group 03) - Should a policy be written for a group that has facilities in several regions, or throughout the nation, a national rate may apply to the policy. The guidelines for receiving a national rate will vary between companies. Some companies may offer a national rate should the client (group) have facilities in three or more regions. These policies should be code as “national” policies, code 001. Other policyholders may have facilities in fewer regions or in a single city, state, or locali
lo
industry specific procedures.
In addition, the state in which the policy is sampled should be entered in the space provided for code selected. For sample units in strata B and AH, this will be the state provided in SU
c
state selected through disaggregation (see Industry Specific Questions and Procedures.
Rating tiers (group 0 ti
the selected policy.
Census class (group 06, codes 001-006) – Although a description of the entire group is necessa note that “census class” is an insurance industry term used to describe various rate categories.
A
the policy was issued.
Health rating (group 07, codes 00 in
enter the this rating for code 007.
Smoking status (group 07, codes 008-010)) - If the pol h
not smoked for 10 years, enter “10 years no tobacco.”
Salary (group 08, code 003) – Enter the salary of the individual insured.
G
policy. This would include employees, spouses, and children.
SIC code (groups 09, code 003) – Enter the SIC code of the company insured by the selected
ip code/location (group 09, code 004) – Enter the zip code or area in which the insured group is
rganizational structure (group 09, code 005) – Indicate whether the company covered by the
xperience rating (group 09, codes 006-007) – Enter the dollar value of claims and number of
articipation rate (group 09, 008) – Indicate the percentage of employees who are covered by the
aximum benefit (group 13, codes 001-002) – Enter the maximum dollar amount of benefits
ut-of-pocket maximum (group 13, code 003) – Enter the annual out-of-pocket maximum dollar
enefit period (group 13, code 004) – Enter the maximum length of time that benefits will be
first ce companies and
ployee pays 100% of the total premium, the policy is 100% voluntary. Should a percentage f the total premium be paid by both the employer and employees, enter the percentages for code
oup 19) – The monthly benefit for disability and accident policies can be xpressed as either a percentage of the policyholder’s monthly salary (code 001) or as a flat dollar
ty to ccupation* (group 21) – For disability and accident insurance, the price may vary by
(group 22) - For disability and accident insurance, the price may vary by salary. Should is be the case, disaggregation will need to be performed to this level. Enter the selected salary policy.
Z
located. If the policy is nationwide, enter as such.
O
selected policy is a corporation, partnership, or has some other type of organizational structure.
E
group members for the previous year.
P
selected policy.
M
provided. Please obtain the annual, lifetime, and out-of-pocket maximum.
O
amount for the individual or the group.
B
provided.
Policy duration (group 13, code 005) - This refers to the nth year of the insurance policy (i.e., year, fifth year, etc.). Policy duration is sometimes called “policy year.” Insuran
insured groups do not want to lock in to a price if conditions may change drastically in future years allowing for flexible premiums. Thus, the duration is to remain constant..
Contribution (group 13, codes 006-008) – This refers to the percentage of the total premium paid by the employers versus the percentage paid by the employee. These percentages will always sum to 100%. If the employer pays 100% of the total premium, the policy is 100% non-voluntary. If the em
o 008.
Monthly benefit (gr e
amount (code 002).
Typically, the policyholder must wait a certain period of time after the onset of a disabili receive benefits. Enter this waiting period for code 003.
O
occupation. Should this be the case, disaggregation will need to be performed to this level.
Salary*
th level.
*Note that groups 21 and 22 should only be completed if a group disability or accident policy is selected and occupation and/or salary are price determining.
Contract description (group 28) – All entries made for this group should refer to the self-ins policy for which the selected contract is written. F
ured or code 001, enter the number of persons overed by the policy. For code 002, enter the number of enrollment codes offered. For code
or premium equivalent (code 005), enter the total employer and employee premium contribution ice for is contract. In addition, this is the item price to be reported for the duplicate CPI quotes.
or codes 006-011, enter the type of coverage provided by the self-insured policy.
inancial payment arrangements (group 29) - If any non-standard payment arrangement
uld correspond to the breakdowns used by the ample unit. Companies typically use a 5-year age range. If the sample unit does not categorize
class is to be riced, it is necessary to describe the entire group.
of the box.
c
003, indicate the number of sites at which the self–insured company operates. The expected number of claims should be entered for code 004.
F
for the self-insured policy. The sample unit will need this value in order to determine the pr th
F
For code 012, indicate the company for which the contract is written.
F
applies, enter the name of the payment option and describe the terms of the special arrangement in the space provided.
Group composition (group 31) – Enter the number of group members for each sex and age range under each applicable rating tier. The age range sho
s
group members by age range, use the fallback of 5 years. Although only one census p
Enter the effective date of the census in the line provided at the bottom
Age Range Tier 1: Self Tier 2: Self + Spouse Male Fem e al Male Female
15-20 2 3 0 0
21-25 3 2 2 0
26-30 4 4 4 2
31-35 10 6 8 6
36-40 4 7 2 4
41-45 8 9 4 2
46-50 6 5 2 4
Policy benefits (group 32) – Enter all deductibles, copayments, and coinsurance that apply f each category of service that may be covered by the selected policy. If the se
or lected policy is ental only, vision only, or pharmacy only, complete only those sections which are applicable to d
the coverage offered. To enter the copayment or coinsurance amounts, indicate both the in-network and out-of-in-network amounts. For example: 20%/30% or $20/$40.
It is possible for companies to have different benefit schedules depending on census class. If this
r the sample unit. Further instructions for calculating the VOS are provided
. a. What is the value of all premium equivalents for this sample unit?
ever, the value of the fees paid for third party administrative services plans cally included in the premium equivalent is needed for VOS calculations.
pany’s premium revenue is derived from national policies versus gional policies?
Regional policies: ____%
rance other than health surance. All other lines of insurance are out of scope. These other insurance lines were given a hance of selection in their appropriate industry. Only the health insurance portion of the sampled companies is to be collected. Unless otherw the synopsis, normal DCM sample unit
entification procedures apply to initiating sample units in this industry.
**NOTE**
being shared with the CPI program. Therefore, coverage of all states is quired.
is the case, only provide the deductible, copayment and c ce
USTRY SPECIFIC QUESTIONS AND PROCEDURES
INDUSTRY SPECIFIC QUESTIONS
1. For this sample unit, what is the value of receipts for Insurance premiums? __________________
Investment income? __________________
Divi
The purpose of this question is to help you obtain the necessary compone calculating the VOS fo
The value of premium equivalents will be excluded from VOS, but it is necessary to provide this value to CPI. How
Be aware that the sampled insurance companies may also carry lines of insu in
Facesheet procedures
1) The measure of size indicated on the facesheet is premiums rather than employment. For collection system.
sary to
m) ill be used by CPI. Follow the normal DCM procedures for coding the status of the PPI quote
ed quotes items for disaggregation purposes.
al DCM procedures for updating the number of items collected.
ercent field should be left blank for all items in all cases.
chief actuary. The chief actuary should be miliar with the pricing for all services offered by the company. Actuaries are responsible for setting insurance premiums and thus, will be the most familiar with pricing. The contact provided
may or may not be the chief actuary.
equivalents” for SO contracts, stop/loss contracts, and minimum premium plans should also be excluded. Please
oss, included in the VOS.
stratum B, a dummy value of 999 will appear. Leave “RU premiums” blank on the SU information screen in the
2) There are no counties provided on the facesheet or cluster form. Therefore, it is unneces obtain this information.
3) No VOS per employee edit range is provided for this industry. Therefore, the VOS per employee calculation is not required.
4) If the sample unit no longer carries health insurance, code it as out of business – 34. If the sample unit never provided health insurance services, code it as out of scope - 43.
5) For ASO contracts, stop/loss contracts, and minimum premium plans, create a duplicate item for each policy selected. The original item will be used by PPI while the duplicate quote (ite w
(item). Code the CPI item as “other” (4). Please note that the CPI items for any of these services are not to be included in the number of assign
Update the number of items to reflect the additional CPI item. Follow norm
6) The relative p
Contact person
The most appropriate contact for obtaining data is the fa
on the facesheet
Entering VOS
1) The VOS is to be calculated as the sum of direct premiums written for health insurance and investment income less dividends paid plus revenue derived from other receipts. Insurance premiums should not include life insurance or reinsurance premiums. “Premium
A
note that these premium equivalents include the fees paid to the sample unit for ASO, stop/l and minimum premium contracts. These fees are to be
Commissions should not be excluded from the VOS as they are considered a cost of doing business and are typically embedded in the premium.
A tool which may be useful in obtaining the VOS components is the insurance company’s annual statement. All life insurance companies are required by law to prepare these statements. “Analysis
f Operations by Lines of Business” found on page 6 of this statement includes all of the VOS n line 28. An example of this exhibit is attached as an appendix.
S component are
siderations,” page 8.
(b) Investment income: “Exhibit 2 - Net Investment Income,” page 10.
(c) Dividends paid: “Exhibit 7 - Dividends and Coupons to Policyholders,” page 12.
stratum AH, the VOS should only include the revenue for the state indicated on the cesheet. For example, if Tennessee appears on the facesheet as Premiums State, the VOS tates.
or the other strata, the VOS should not be limited to the state in which the sample unit is located.
) Once the ISDWS has been completed, disaggregate between national and regional policies for
gregate by the states in hich the sampled establishment earns revenue. All services provided at the sampled location are
e eet to determine the sample unit.
by
3) Once the type of service and scope of policy (national vs. regional) have been selected , ld
) Next, after pulling the policy, select the census class which will represent the entire policy
rice vary for different occupations or salary levels within the same census class. Should this be o
components. Health insurance premiums are given on line 1, net investment income on line 4, and dividends paid o
Other exhibits which provide more detailed information for each individual VO listed below:
(a) Health insurance premiums: “Exhibit 1, Part 1- Premiums and Annuity Con
2) For fa
should only include revenue generated in Tennessee even if the company earns revenue in other s
F
Disaggregation procedures 1
each ISDWS category selected. For each product line, list these percentages in the comments section of the ISDWS. This information is required by CPI to weight all items.
2) For sample units in strata B and MO, the next step should be to disag w
eligible for selection. Again, if more than one company is located at the sampled address, use th AMB number provided on the facesh
List these percentages in the comments section of the ISDWS. This information is required CPI to weight items in stratum MO.
disaggregate between group and individual policies. At this point, the policy to be priced shou be pulled.
4
(group and individual policies). It is the per member premium for the selected census class which will be repriced.
5) Group disability and accident insurance policies may require further disaggregation should the p
the case, disaggregate to an occupation in group 21 or salary level in group 22. It is the per ium for this salary or occupation for the selected census class that will be repriced.
) It is possible for companies to offer multiple option policies. Group members can choose d r only to the
lan options. For example, if the group members are able to purchase dental and
ed.
, two items will be ollected for each selected contract or plan. The PPI will use the original item for collecting the
er-e fer-eer-es for ther-e er-er-
employer-ponsored plan. At repricing, the actuary will need the total number of group members, the type of m.
culate the administrative fees.
n I.
a medical savings account be selected, the price to be collected is the net interest come earned on the selected account. This is calculated as the difference between the interest
t credited to the account holder. It will be necessary to btain the value of the account, current interest rate earned on investments and current rate credited.
Price = [account value ($)] [earned rate(%)-credited rate(%)]
member prem
Collection procedures All Services
1
between managed care and fee-for-service plans. Each option is priced independently and shoul be treated as separate policies for collection purposes. Group descriptions should refe
group covered by the selected option.
2) If the type of service selected is a tandem policy, be sure to describe all relevant p
vision under a single plan, it is necessary to complete the box for dental as well as
other applicable checklist sections for both types of insurance. These policies are to be coded as
“tandem policies” for type of service (code 007). Indicate the types of coverage in space provid 3) For ASO contracts, stop/loss contracts, and minimum premium plans
c
fees for servicing the actual contract and the CPI will use the additional item for the employ sponsored plan that applies to the contract collected. Therefore, only one set of data needs to be collected for the selected contract. For PPI, the item price is the fees.
fees for servicing the actual contract and the CPI will use the additional item for the employ sponsored plan that applies to the contract collected. Therefore, only one set of data needs to be collected for the selected contract. For PPI, the item price is the fees.