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With an increasing number of companies outsourcing claim handling to third-party administrators (TPAs), and with the market for TPA services becoming more and more competitive, actuaries can play a crucial role in helping TPAs provide quality service, deliver promised outcomes, and afford a sustained competitive advantage.

Actuaries offer a number of skills that can be critical to the success of the TPA business.

Our Actuarial Expertise can help you stay on top of Today’s Competitive Market Challenges

TPAs face a myriad of strategic and tactical near-term challenges. Consolidation in the industry, the influx of venture capital with pressures for growth and earnings, greater financial disclosure and transparancy requirements, market-driven changes in product pricing, medical cost inflation, and reforms in state workers’ compensation laws are all affecting the profits of TPAs. In an increasingly technology-driven business, actuaries can lend their expertise in overcoming these and other challenges.

Not just TPA, but their clients, brokers, and carriers can benefit from the contributions our actuarial services provide.

Because a self-funded plan is a mini-insurer, it is not at all surprising that actuaries are directly or indirectly involved in such plans in these ways:

  • Providing benefit content studies
  • Recommending participant contributions, COBRA premiums, or funding contributions
  • Computing claim reserves by either traditional or AICPA SOP No. 92-6 standards
  • Doing state-required certifications (MEWAs, FL, and IA governmental entities, e.g.)
  • Managed care-related studies (Capitation, and indemnity v. HMO employer contributions for parity purposes, e.g.)
  • Estimating impact of anti-selection where high/low plans are involved
  • Establishing underwriting rules where a go or no go decision is to be made on plan adoption, renewal, open enrollment, e.g.
  • Computing reserves needed to meet AICPA FAS No. 106 (retired life reserves) or FAS No. 112 (post-termination reserves)

Monte Carlo techniques are useful in checking the reasonableness of stop-loss quotes, particularly where several benefit options are involved.

Are you in need of Actuarial Services?