GVHR » Topics » Medical Benefit Plan Liabilities

These excerpts taken from the GVHR 10-K filed Mar 16, 2009.

Medical Benefit Plan Liabilities

 

The Company provides medical benefit plans to its client employees through several medical benefit plan providers; under a minimum premium plan with BCBSF/HOI and guarantee cost contracts for all other plans.

 

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Table of Contents

 

With respect to the medical benefit plans with BCBSF/HOI, the Company establishes medical benefit plan liabilities for benefit claims that have been reported but not paid and claims that have been incurred but not reported. These reserves are determined quarterly by the Company based upon a number of factors, including but not limited to actuarial calculations, current and historical claim payment patterns, plan enrollment and medical trend.

 

For each period, the Company estimates the relevant factors, based primarily on historical data and uses this information to determine the assumptions underlying the reserve calculations. An extensive degree of judgment is used in this estimation process. Due to the considerable variability of health care costs, adjustments to health reserves are sometimes significant. For example, an increase (decrease) in the margin factor used to calculate claims incurred but not reported by 0.5% at December 31, 2008, would have resulted in an increase (decrease) in the incurred but not reported claim reserve of approximately $0.6 million.

 

During the year ended December 31, 2008, the Company recorded a net health plan surplus of $6.0 million that decreased its cost of services and reserves for incurred but not reported claims. During the year ended December 31, 2007, the Company recorded a net health plan surplus of $3.1 million that decreased its cost of services and reserves for incurred but not reported claims.

 

The following table provides the amount of the medical benefit plan liabilities for benefit claims that have been reported but not paid and claims that have been incurred but not reported (in thousands):

 

 

 

Year Ended
December 31,

 

 

 

2008

 

2007

 

Incurred but not reported claims

 

$

9,491

 

$

10,100

 

Other health plan liabilities

 

638

 

256

 

Total medical benefit plan liabilities

 

$

10,129

 

$

10,356

 

 

If the actual amount of the Company’s medical benefit plan liabilities at the end of each period were to increase (decrease) from the estimates used by the Company, then the Company would have an increase in the amount of its future period health benefit subsidy (surplus).

 

The Company’s consolidated financial statements reflect the estimates made with respect to medical benefit plan liabilities within the cost of services on the Company’s consolidated statement of operations and within the accrued insurance premiums and health reserves on the company’s consolidated balance sheet.

 

Medical
Benefit Plan Liabilities



 



The Company
provides medical benefit plans to its client employees through several medical
benefit plan providers; under a minimum premium plan with BCBSF/HOI and guarantee
cost contracts for all other plans.



 



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Table of Contents



 



With respect to
the medical benefit plans with BCBSF/HOI, the Company establishes medical
benefit plan liabilities for benefit claims that have been reported but not
paid and claims that have been incurred but not reported. These reserves are
determined quarterly by the Company based upon a number of factors, including
but not limited to actuarial calculations, current and historical claim payment
patterns, plan enrollment and medical trend.



 



For each period,
the Company estimates the relevant factors, based primarily on historical data
and uses this information to determine the assumptions underlying the reserve
calculations. An extensive degree of judgment is used in this estimation
process. Due to the considerable variability of health care costs, adjustments
to health reserves are sometimes significant. For example, an increase
(decrease) in the margin factor used to calculate claims incurred but not
reported by 0.5% at December 31, 2008, would have resulted in an increase
(decrease) in the incurred but not reported claim reserve of approximately
$0.6 million.



 



During the year
ended December 31, 2008, the Company recorded a net health plan surplus of
$6.0 million that decreased its cost of services and reserves for incurred but
not reported claims. During the year ended December 31, 2007, the Company
recorded a net health plan surplus of $3.1 million that decreased its cost
of services and reserves for incurred but not reported claims.



 



The following
table provides the amount of the medical benefit plan liabilities for benefit
claims that have been reported but not paid and claims that have been incurred
but not reported (in thousands):



 















































 



 



Year Ended

December 31,



 



 



 



2008



 



2007



 



Incurred but not reported claims



 



$



9,491



 



$



10,100



 



Other health plan liabilities



 



638



 



256



 



Total medical benefit plan liabilities



 



$



10,129



 



$



10,356



 




 



If the actual
amount of the Company’s medical benefit plan liabilities at the end of each
period were to increase (decrease) from the estimates used by the Company, then
the Company would have an increase in the amount of its future period health
benefit subsidy (surplus).



 



The Company’s
consolidated financial statements reflect the estimates made with respect to
medical benefit plan liabilities within the cost of services on the Company’s
consolidated statement of operations and within the accrued insurance premiums
and health reserves on the company’s consolidated balance sheet.



 



Medical
Benefit Plan Liabilities



 



The Company
provides medical benefit plans to its client employees through several medical
benefit plan providers; under a minimum premium plan with BCBSF/HOI and guarantee
cost contracts for all other plans.



 



46
















Table of Contents



 



With respect to
the medical benefit plans with BCBSF/HOI, the Company establishes medical
benefit plan liabilities for benefit claims that have been reported but not
paid and claims that have been incurred but not reported. These reserves are
determined quarterly by the Company based upon a number of factors, including
but not limited to actuarial calculations, current and historical claim payment
patterns, plan enrollment and medical trend.



 



For each period,
the Company estimates the relevant factors, based primarily on historical data
and uses this information to determine the assumptions underlying the reserve
calculations. An extensive degree of judgment is used in this estimation
process. Due to the considerable variability of health care costs, adjustments
to health reserves are sometimes significant. For example, an increase
(decrease) in the margin factor used to calculate claims incurred but not
reported by 0.5% at December 31, 2008, would have resulted in an increase
(decrease) in the incurred but not reported claim reserve of approximately
$0.6 million.



 



During the year
ended December 31, 2008, the Company recorded a net health plan surplus of
$6.0 million that decreased its cost of services and reserves for incurred but
not reported claims. During the year ended December 31, 2007, the Company
recorded a net health plan surplus of $3.1 million that decreased its cost
of services and reserves for incurred but not reported claims.



 



The following
table provides the amount of the medical benefit plan liabilities for benefit
claims that have been reported but not paid and claims that have been incurred
but not reported (in thousands):



 















































 



 



Year Ended

December 31,



 



 



 



2008



 



2007



 



Incurred but not reported claims



 



$



9,491



 



$



10,100



 



Other health plan liabilities



 



638



 



256



 



Total medical benefit plan liabilities



 



$



10,129



 



$



10,356



 




 



If the actual
amount of the Company’s medical benefit plan liabilities at the end of each
period were to increase (decrease) from the estimates used by the Company, then
the Company would have an increase in the amount of its future period health
benefit subsidy (surplus).



 



The Company’s
consolidated financial statements reflect the estimates made with respect to
medical benefit plan liabilities within the cost of services on the Company’s
consolidated statement of operations and within the accrued insurance premiums
and health reserves on the company’s consolidated balance sheet.



 



These excerpts taken from the GVHR 10-K filed Mar 17, 2008.

Medical Benefit Plan Liabilities

        The Company provides medical benefit plans to its client employees through several medical benefit plan providers; under a minimum premium plan with BCBSF/HOI; a retrospective premium plan with Aetna for the Aetna PPO plan; and guarantee cost contracts for all other plans.

        With respect to the medical benefit plans with BCBSF/HOI, the Company establishes medical benefit plan liabilities for benefit claims that have been reported but not paid and claims that have been incurred but not reported. These reserves are determined quarterly by the Company based upon a number of factors, including but not limited to actuarial calculations, current and historical claim payment patterns, plan enrollment and medical trend.

        For each period, the Company estimates the relevant factors, based primarily on historical data and uses this information to determine the assumptions underlying the reserve calculations. An extensive degree of judgment is used in this estimation process. Due to the considerable variability of health care costs, adjustments to health reserves are sometimes significant. For example, an increase (decrease) in the margin factor used to calculate claims incurred but not reported by 1% at December 31, 2007 would have resulted in an increase (decrease) in the incurred but not reported claim reserve of approximately $1.2 million.

        During the year ended December 31, 2007, the Company recorded a net health plan surplus of $3.1 million that decreased its cost of services and reserves for incurred but not reported claims. During the year ended December 31, 2006, the Company recorded a health plan subsidy of $2.5 million that increased its cost of services and reserves for incurred but not reported claims.

        The following table provides the amount of the medical benefit plan liabilities for benefit claims that have been reported but not paid and claims that have been incurred but not reported (in thousands):

 
  Year Ended
December 31,

 
  2007
  2006
Incurred but not reported claims   $ 10,100   $ 10,609
Other health plan liabilities (including recall premiums)     256     2,457
   
 
Total medical benefit plan liabilities   $ 10,356   $ 13,066
   
 

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        If the actual amount of the Company's medical benefit plan liabilities at the end of each period were to increase (decrease) from the estimates used by the Company, then the Company would have an increase in the amount of its future period health benefit subsidy (surplus).

        The Company's consolidated financial statements reflect the estimates made with respect to medical benefit plan liabilities within the cost of services on the Company's consolidated statement of operations and within the accrued insurance premiums and health reserves on the company's consolidated balance sheet.

Medical Benefit Plan Liabilities



        The Company provides medical benefit plans to its client employees through several medical benefit plan providers; under a minimum premium plan with BCBSF/HOI; a
retrospective premium plan with Aetna for the Aetna PPO plan; and guarantee cost contracts for all other plans.



        With
respect to the medical benefit plans with BCBSF/HOI, the Company establishes medical benefit plan liabilities for benefit claims that have been reported but not paid and claims that
have been incurred but not reported. These reserves are determined quarterly by the Company based upon a number of factors, including but not limited to actuarial calculations, current and historical
claim payment patterns, plan enrollment and medical trend.



        For
each period, the Company estimates the relevant factors, based primarily on historical data and uses this information to determine the assumptions underlying the reserve
calculations. An extensive degree of judgment is used in this estimation process. Due to the considerable variability of health care costs, adjustments to health reserves are sometimes significant.
For example, an increase (decrease) in the margin factor used to calculate claims incurred but not reported by 1% at December 31, 2007 would have resulted in an increase (decrease) in the
incurred but not reported claim reserve of approximately $1.2 million.



        During
the year ended December 31, 2007, the Company recorded a net health plan surplus of $3.1 million that decreased its cost of services and reserves for incurred but
not reported claims. During the year ended December 31, 2006, the Company recorded a health plan subsidy of $2.5 million that increased its cost of services and reserves for incurred but
not reported claims.




        The
following table provides the amount of the medical benefit plan liabilities for benefit claims that have been reported but not paid and claims that have been incurred but not
reported (in thousands):


























































 
 Year Ended

December 31,

 
 2007
 2006
Incurred but not reported claims $10,100 $10,609
Other health plan liabilities (including recall premiums)  256  2,457
  
 
Total medical benefit plan liabilities $10,356 $13,066
  
 



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NAME="page_ds46801_1_60">















        If the actual amount of the Company's medical benefit plan liabilities at the end of each period were to increase (decrease) from the estimates used by the Company, then the Company
would have an increase in the amount of its future period health benefit subsidy (surplus).



        The
Company's consolidated financial statements reflect the estimates made with respect to medical benefit plan liabilities within the cost of services on the Company's consolidated
statement of operations and within the accrued insurance premiums and health reserves on the company's consolidated balance sheet.



This excerpt taken from the GVHR 10-K filed Mar 16, 2007.
Medical Benefit Plan Liabilities
 
The Company provides medical benefit plans to its client employees through several medical benefit plan providers; under a minimum premium plan with BCBSFL; a retrospective premium plan with Aetna for the Aetna PPO plan; and guarantee cost contracts for all other plans.
 
With respect to the medical benefit plans with BCBSFL, the Company establishes medical benefit plan liabilities for benefit claims that have been reported but not paid and claims that have been incurred but not reported. These reserves are developed on an annual basis by an independent actuary using actuarial principles and assumptions that consider a number of factors, including paid claims, claim development factors, plan enrollment, medical trend and the potential variability (margin) in these factors.


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Table of Contents

 
The Aetna PPO medical benefit plan is a retrospective funding arrangement whereby the PPO plan is subject to a 5.0% additional premium if actual plan costs are greater than premium payments for the policy year.
 
For each period, the Company estimates the relevant factors, based primarily on historical data and uses this information to determine the assumptions underlying the reserve calculations. An extensive degree of judgment is used in this estimation process. Due to the considerable variability of health care costs, adjustments to health reserves are sometimes significant. For example, an increase (decrease) in the margin factor used to calculate claims incurred but not reported by 1% at December 31, 2006 would have resulted in an increase (decrease) in the incurred but not reported claim reserve of approximately $1.1 million.
 
During the year ended December 31, 2006, the Company, in conjunction with its annual actuarial calculation of incurred but not reported claims and the Aetna health plan premium true-up, recorded a net health plan subsidy of $2.5 million that increased its cost of services and reserves for incurred but not reported claims. During the year ended December 31, 2005, the Company, in conjunction with its annual actuarial calculation of incurred but not reported claims and the Aetna health plan premium true-up, recorded a health plan surplus of $4.3 million that decreased its cost of services and reserves for incurred but not reported claims.
 
The following table provides the amount of the medical benefit plan liabilities for benefit claims that have been reported but not paid and claims that have been incurred but not reported (in thousands):
 
                 
    Year Ended
 
    December 31,  
    2006     2005  
 
Incurred but not reported claims
  $ 10,609     $ 13,333  
Other health plan liabilities (including recall premiums)
    2,457       1,709  
                 
Total medical benefit plan liabilities
  $ 13,066     $ 15,042  
                 
 
If the actual amount of the Company’s medical benefit plan liabilities at the end of each period were to increase (decrease) from the estimates used by the Company, then the Company would have an increase in the amount of its future period health benefit subsidy (surplus).
 
The Company’s consolidated financial statements reflect the estimates made with respect to medical benefit plan liabilities within the cost of services on the Company’s consolidated statement of operations and within the accrued insurance premiums and health reserves on the company’s consolidated balance sheet.
 
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