Annual Actuarial Report

The Report Format is standard as well as the Requisite Data to complete the Report. The actuarial methodology in COBRA Premium Determination is part of this sub-site. The typical work procedure involves the receipt by fax or e-mail of 3-4 items of information and a 1-3 day turnaround time. Fax return on request is available.

These items following:

• Report Format
• General Commentary on COBRA Premiums
• COBRA Premiums by Attained Age (Optional)
• COBRA Premiums by Geographical Area (Optional)
• Requisite Data and Work Terms
• Compelling Reasons to Use the Annual Actuarial Report.

ANNUAL ACTUARIAL REPORT FOR THE SELF-FUNDED HEALTH CARE PLAN OF

TO:		FROM:	Self-Funding Actuarial Services, Inc.
			8025 North Point Boulevard., Suite 207W
			Winston-Salem, NC 27106
			www.self-fundhealth.com
Contact:			Contact: Carlton Harker, FSA, MAAA
	Tel:			Tel: (336) 759-2035
	Fax:			Fax: (336) 896-0392
				E-Mail: harker2@earthlink.net

We respond to your request for actuarial services.

Plan Sponsor:

Plan Year:

The following actuarial computations and attestations are provided herein:

Exhibit I
	Part A –	Recommended Monthly Factors to fund paid claims for the above-cited plan year.
	Part B –	Monthly COBRA Premiums which comply with applicable federal laws and regulations for the above-cited plan year. Set forth in www.self-fundhealth.com are these items which may be of use and value to the reader: · General Commentary on COBRA Premiums · COBRA Premiums by Attained Age (Optional) · COBRA Premiums by Geographical Area (Optional).
Exhibit II
	Plan Obligations, as of the date indicated herein, which meet the requirements and /or guidelines of AICPA SOP No. 92-6.
Exhibit III (Optional)
	Monte Carlo Simulation
Exhibit IV (Optional)
	Benefit Content Analyses
Exhibit V
	HSA Modelling by Monte Carlo Simulation

EXHIBIT I

RECOMMENDED FUNDING FACTORS AND COBRA PREMIUMS

Plan Sponsor:

DOL/IRS: Plan Number N/A Plan Year:

PART A – MONTHLY FUNDING FACTORS

The Plan Sponsor may anticipate the following funding demands so as to provide for projected plan claims (no allowance for reserve changes or for fixed costs) for the Plan Year show above:

	Medical and Rx	Lasered Participants	Aggregating Specific	Dental	Vision	Short Term Disability	Total
Individual
Participant and Child
Participant and Spouse
Family

Plan Sponsor may fund using; (a) a qualified trust [IRC §501(c)(9)]; (b) a non-qualified trust (IRC §419A); (c) a designated bank account (using Plan Sponsor’s Tax I.D. Number); or (d) internal or memorandum accounts only. Methods (a) and (b) are funded and plan assets are created. Methods (b) and (c) are unfunded and plan assets are not created.

PART B – MONTHLY COBRA PREMIUMS

Monthly COBRA premiums (2% is included) for the Plan Year shown above:

	Medical and Rx	Lasered Participants	Aggregating Specific	Dental	Vision	Short Term Disability	Total
Individual
Participant and Child
Participant and Spouse
Family

PART C - BASIS OF COMPUTATIONS

· COBRA premiums are based upon the sum of: (a) projected paid claims; (b) fixed costs (stop-loss premiums, administration fees, employer internal plan costs, outsourced service costs, e.g.); (c) amortization of Plan Obligations (as contemplated in AICPA SOP No. 92-6.)

· Projected paid claims (below the specific stop-loss limitation) of $_________were determined as follows: (a) retrospectively (actuary relied on past data); (b) prospectively (actuary relied on stop-loss terms of renewal); Monte Carlo simulation; or (c) combination of (a) (b) and (c) as appears to the actuary to be the most reasonable.

· Items furnished by the Plan Sponsor or Claims Administrator, which were used on the computations, are attached hereto.

· Plan Sponsor's internal costs are assumed to be __% of projected claims or $________

and are treated as a plan cost. Such internal plan costs must be shown as such on the Form 5500. The actuary assumes that the Plan Sponsor is able to justify these assumed internal costs.

· Reserves for Plan Obligations are shown in Exhibit II, herein. An amortization charge to create and/or maintain such reserve is assumed to be __% of projected paid claims or $_________.

· Where projected paid claims were determined retrospectively, an inflation factor of __% of such claims or $___________was assumed.

Date	By________________________________ Carlton Harker, FSA, MAAA Self-Funding Actuarial Services, Inc.

EXHIBIT II

ACTUARIAL CERTIFICATION OF RESERVES AND PLAN OBLIGATIONS OF THE HEALTH CARE PLAN OF

AS OF____________

1.I, Carlton Harker, Consulting Actuary, am a principal of Self-Funding Actuarial Services, Inc., a Fellow of the Society of Actuaries and a member of the American Academy of Actuaries. My firm has been retained to provide calculations of COBRA premiums for the above-cited health care plan. I have determined, by appropriate actuarial assumptions and methods, the Plan Obligations referred to below. I have relied upon the claims administrator and/or the plan sponsor of the subject health care plan as to the accuracy and completeness of any underlying information provided to me and used in the computation of such Plan Obligations. In other aspects, my examination included such review of the actuarial assumptions and methods and such tests of calculations as I considered necessary under the circumstances. Enumerative procedures were replaced by statistical modelling techniques, where provided data was below acceptable credibility limits or not provided.

2. Plan Obligations as of

a. Estimated incurred and unpaid (as contemplated by IRC § 419 A (c)(l)................$ Includes claims due and unpaid, in course of settlement and incurred but not reported. Excludes any reserve for pending or ongoing lawsuits. Reserve is net of any excess loss recovery.

b. Estimated future claims not yet incurred (settlement basis as contemplated by AICPA SOP No. 92-6 only)….$.

Includes future claims, not yet incurred, but deemed to be a plan obligation, as contemplated by AICPA SOP No. 92-6 as I understand it. Such Plan Obligations represent the discounted value of future expected claims on a settlement basis, assuming that persons with significant health problems cease assumed to be active on the valuation date and elect continuation coverage. Weighted continuation period is to be 18 months. Such electing persons are those who have an economic advantage to continue as determined by statistical modelling. When discounting future net claims (gross claims less participant cost of continuation coverage), these assumptions were made:

· Interest at .5% per month.

· Medical inflation at .5% per month.

· Lapsation of continues at 3% per month.

· Effect of anti-selection (healthy lives discontinue; unhealthy lives continue) at 2% per month.

c. Plan Obligations (a)+ (b) (contemplated by AICPA SOP No. 92-6: not by IRC §419A(c)(1)......$

3. In my opinion, the amounts shown herein are useful in the calculation of COBRA premiums and:

· Are computed in accordance with commonly accepted actuarial standards (or estimated by reasonable approximation thereto by statistical modelling) consistently applied and are fairly stated in accordance with sound actuarial principles.

· Make reasonable provision, in the aggregate, for all obligations of the plan as contemplated by AICPA SOP No. 92-6 (Item c) or IRC §419A(c)(1) Item a).

· Includes reasonable provisions, in the aggregate, for any related items which should be established.

Date	By________________________________ Carlton Harker, FSA, MAAA Self-Funding Actuarial Services, Inc.

General Commentary on COBRA Premiums

· Federal law requires that, for self-funded plans, COBRA premiums shall be determined on an actuarial basis and shall take into account such factors as the Secretary of the Treasury shall proscribe by regulations. Such regulations have not yet been issued. There appears to be little likelihood that such will be issued in the near future.

· The COBRA beneficiary must be given at least a 30-day grace period. Unless the benefits or plan terms change, no COBRA premiums may be increased for any one COBRA beneficiary more often than annually. Even where the stop-loss has the employer as applicant, owner, payer and beneficiary, a change in stop-loss premiums or terms will, in and of itself, justify a change in COBRA premiums. An employer may permit, but not require premiums to be paid less often than monthly.

· When COBRA premiums are increased, the plan may (a) require that all existing COBRA beneficiaries pay the increased amount or (b) may allow such beneficiaries to continue at their lower premiums. Such (a) or (b) practice must be consistently applied to all beneficiaries for all periods regardless of whether the premium change is an increase or decrease. Many employers do not change COBRA premiums for existing COBRAs as a policy matter.

· An employee, with family coverage, (e.g., a wife and three children), may elect a family COBRA premium or may elect five individual COBRA rates where each family member elects coverage in such family member's own name. If a man and wife are covered as a family and only the wife elects COBRA, she may be charged the individual rate and not the dependent rate. An employee, a dependent spouse or a child who elects single coverage would each pay the individual rate. Similar logic applies to an employee and spouse.

· Where non-core benefits (dental, e.g.) are part of the basic benefit package, a COBRA beneficiary need not be provided only core benefits. Where an active participant may pick/chose medical or dental, the COBRA beneficiary must be given dental if such is requested.

· In determining COBRA premiums, the actuary may use general inflation rates but not medical-specific inflation rates.

· Persons, other than the COBRA beneficiary, may both elect and pay COBRA premiums (Medicaid, a hospital-assignee, a dependent child's grandfather, e.g.).

· Where both the plan document and the certificate booklet are amended to reflect a change in funding methodology, the plan may vary COBRA premiums by: (a) geographical cost areas; (b) attained ages of covered beneficiaries or; (c) whether stop-loss specific have been lasered or increased for certain cover persons of poor health. Such practices are acceptable only if adopted as a plan funding modification and so stated in the plan document.

· COBRA beneficiaries must be treated as having contingent coverage when they are in their grace period.

· For control purposes, the employer may bill for COBRA premiums by either the coupon or the monthly billing method. Formal notification that coverage has ceased due to non-payment may be sent to a COBRA beneficiary. However, generally it is not provided.

· COBRA premiums in-transit (not yet received by the Plan Sponsor) do not exist for plan asset purposes.

· COBRA continuation coverage does not extend to disability, death benefits, MSAs or long term care benefits.

· The actuarially-determined COBRA premiums may, at the Plan Sponsor's option, be used to determine participant contributions. Such contributions may also be determined independent of COBRA premiums. Care should always be taken to avoid a covered person's contribution being in excess of a COBRA premium.

· Within a single plan, where benefits are the same and claims experience is pooled different COBRA premiums are not permitted even if claims costs are different. Employer's Plant A, with bad experience, has the same COBRA premiums as Plant B, with good experience.

· Legal challenges to the amount of a COBRA premiums is a federal, not state, court matter because of ERISA preemption.

· Failure to timely pay a COBRA premium because of Participant's lack of understanding is no defense; relief would be provided were the participant to be incapacitated or in a coma.

· Where divorced wife is depending on her former husband to pay her COBRA premiums, such wife's coverage may be in peril due to his potential non-payment of premium.

· Mailbox rules apply when date of COBRA payment is in question.

· Little legal slack will be afforded the beneficiary who fails to pay a COBRA premium timely.

· Plan is in peril which pays benefits during a COBRA premium grace period.

· COBRA does not demand premium nor termination of COBRA coverage notices. Premium notices are usually provided, however. Coupons are the most efficient method.

· Two-tier plans (I,F,e.g.) should consider going to at least three-tier to avoid being selected against. Where the COBRA premiums are $150 I, $420F, a participant and spouse might each elect individual thereby paying $300 as opposed to $420, They forfeit the secondary benefit (additional extension to spouse if participant dies, e.g.). The actuarial value of such secondary benefit is very small.

· Use of COBRA, in lieu of an early retirement benefit, for the so-called 60 and out plans has merit in that such coverage from an accounting standpoint is deemed post-coverage as opposed to post- retirement. That is FAS No. 112 will apply and not FAS No. 106. A clear plan amendment supporting this change from retiree to COBRA is required.

· Regular COBRA premiums may be increased by 50% for disabled participant (and covered dependents) who are on the additional 11-month disability extension. Such 50% increase does not apply to nondisabled qualified beneficiaries who elect COBRA in their own rights.

· Once participant and covered dependents elect family coverage and commence COBRA coverage, they may not un-elect to individual status thereafter.

· Challenges to COBRA premiums (usually from disgruntled participants) are made to (a) the Internal Revenue Service or (b) the Department of Labor or are made by a former employee's attorney in an alleged wrongful employment termination suit. Usually the complaint is directly attributable to the beneficiary’s lack of understanding ordue to complexities involving (a) high-low plans, (b) core and noncore benefits or (c) multiple-tiers. When the complaint goes to the IRS, such Department will make inquiry to see that its mandates are honored. Similarly with the DOL. The attorney, in gathering background data, will attempt to find flaws in COBRA - particularly the premiums. The attorney will seek to find a reason to invoke either the federal or state RICO statute.

· In managing its medical plan risks, the employer may, with due consideration, become the premium payer and beneficiary of the COBRA coverage of a newly-hired employee. Such assignment of rights may be useful in transferring coverage of a new employee from the old to new plan with due regard to such facts as (a) pre-existing condition, (b) health condition, (c) managed care choice limitations, (d) personnel considerations, etc.

COBRA Premiums By Attained

Age (Optional)

Some plan sponsors may have concern that COBRA beneficiaries typically are older and more affluent than the general population of plan covered persons. To have the purposes of COBRA better met, COBRA premiums may be computed by attained age so as to make COBRA more accessible to younger lives. Industry-average percentages which, when applied to the COBRA premiums on Page 2, will result in premiums which are reasonable, equitable and equivalent, are as follows:

Attained		Medical
Age	Individual		Participant and Child
Dependent Child	60%			N/A
Below Age 35	80			90%
35-44	100			110
45-54	125			115
55-64	150			125
64-over	170			140

Attained		Medical
Age	Individual		Participant and Child
Dependent Child	N/A			N/A
Below Age 35	80%			90%
35-44	100			110
45-54	125			115
55-64	150			125
64-over	170			140

To make COBRA medical premiums effective by attained age, the Plan Document must be appropriately amended. Such amendment should be approved by the Employer's legal counsel. The Employer may wish to consider grading participant contributions by attained age. Also, in lieu of industry-average percentages, above-used, the Employer may wish to grade premiums by its own age distributions or even vary the slope of such percentages to a flatter slope. Age is that applicable at the initial qualifying event. Dental and vision premiums are not age-graded. A sample amendment follows:

Plan Funding Document amendment Relevant Benefit Funding

COBRA medical premiums shall be computed by attained age and annually certified as being reasonable, equitable and equivalent to such premiums not computed by attained age. Such certification should also provide that the sloping of the attained age COBRA premiums meet the requirements of the Age Discrimination in Employment Act and clarifying regulations. The purpose of this amendment is to make COBRA more accessible to the younger and less affluent workers. COBRA statutory requirements as regards similarly situated will be met because in funding for the active plan participants, the plan sponsor automatically provides more funds for the younger and healthier covered persons than for the older and less healthy covered persons.

COBRA Premiums By Geographical Area (Optional)

It is appropriate, with a Plan Amendment which modifies the Plan's funding methodology, to charge COBRA premiums by geographical area. The similarly situated rule must be met, however. A plan document and booklet amendment is needed where the Plan Sponsor elects to vary such premiums by geographical area. Possible plan document amendment language might be: “Premiums for COBRA Coverage Continuation shall be based upon the geographical area of the residence of the plan participant in accordance with the Table of Area Ratings and COBRA Premium Indices attached hereto. Such area rating is an actuarial factor used in determining reasonable estimates of costs for similarly situated participants who elect coverage continuation.” Area ratings maybe used or not used as a plan funding method as the Employer may elect; such use or non-use should be consistent from year to year, however.

Area Ratings are attached hereto. The 24 Area Ratings are converted into 12 COBRA Premium Indices as shown in the following table. Employer, whose employees all reside in Area 13, would apply the computed COBRA premiums to COBRA participants in Column 7. Where such COBRA participant moved to Area 18, the computed COBRA premium would be (increased by a factor of 1. l. A cost spread of 1 to 1.55 is arbitrarily assumed. Such spread may be widened or shortened so tong as such spread is reasonable.

COBRA PREMIUM INDICES
Area Rating
	1	2	3	4	5	6	7	8	9	10	11	12
1-2	100	95	95	90	90	85	80	75	75	70	70	65
3-4	105	100	95	90	85	85	80	75	75	70	70	65
5-6	110	105	100	95	95	90	85	80	80	75	75	70
7-8	115	110	105	100	95	90	85	80	80	75	75	70
9-10	120	115	110	105	100	95	90	85	85	80	80	75
11-12	125	120	115	110	110	100	95	90	85	80	80	75
13-14	130	125	120	115	115	105	100	95	90	85	85	80
15-16	135	130	125	120	120	110	105	100	95	90	85	80
17-18	140	135	130	125	125	115	110	105	100	95	90	85
19-20	145	140	135	130	130	120	115	110	105	100	95	90
21-22	150	140	140	135	135	125	120	110	110	105	100	95
23-24	155	145	145	140	140	130	125	115	115	110	110	100

TABLE OF AREA RATINGS

This table shows, by city and state, the relative economic value of certain health care costs. The ratings range from a low of 1 to a high of 24. Postal Zip Codes (first three digits only) are shown for each city and surrounding area. The economic index is the so-called Geographic Adjustment Factor for Hospitals as computed for Medicare provider reimbursement purposes. Such table is set forth as being reasonable, but not as the only one which could be devised.

STATE/CITY Z1P	RATE	STATE/CITY ZIP		RATE	STATE/CITY ZIP		RATE
ALABAMA		FLORIDA			KANSAS
Anniston 359-362	3	Fort Lauderdale	333-334,349	8	Kansas City	660-662,667
Birmingham 350-353,355 Fort Lauderdale Fort Myers Gainesvillc Jacksonville Miami Orlando Panama City Pcnsncola Tallahassee Tnmpu 350-353,355	5	Fort Myers	339	4	Topeka	663-668,673
Huntsville 356-358	2	Gainesville	326	6	Wichita	669-675	4
Mobile 3b3-366	2	Jacksonville	320-322	4	Rural Kansas	676-679	1
Montgomery 360-361, 367-368	1	Miami	330-332	8
Tuscaloosa 354-369	1	Orlando	327-329, 338	7	KENTUCKY
		Panama City	324	4	Lexington	403-419	1
ALASKA		Pensacola	325	4	Louisville	400-402, 427	5
All 995-999	18	Tallahassee	323	4	Owensboro	420-425	1
		Tampa	335-337, 340-342	5
ARIZONA					LOUISIANA
Flagstaff 859-865	6	GEORGIA			Alexandria	713-714
Phoenix 850-855,859	7	Albany	316-317	1	Baton Rouge	707-708	4
Tucson 856-857	5	Athens	305-307	3	Lafayette	705	2
		Atlanta	300-303,311	8	Lake Charles	706	1
ARKANSAS		Augusta	308-309	8	Monroe	712	2
Fayetteville 725-727	3	Columbus	318-319	3	New Orleans	700-704	6
Fort Smith 728-729	1	Macon	304,310,312	3	Shreveport	711	6
Jonesboro 724-725	1	Savannah	3l3-315	8
Little Rock 720-723	3
Pine Bluff 716-719	1	HAWAII			MAINE
		All	967-968	11	Bangor 044-047		6
					Portland 040-043, 048-049		7
CALIFORNIA
Bakersfield 932-933,93	8	IDAHO			MARYLAND
Fresno 936-938	9	A11	832-838	3	Baltimore - Urban	210-214	11
Los Angeles 900-919,923-929	20				Baltimore -Suburbs	206-209	JO
Oakland 945-948	24	ILLINOIS
Redding 955,9.59	14	Bloomington	617	4	MASSACHUSETTS
Sacramento 956-958	14	Champaign	618-619,624	4	Boston	014-027	13
San Diego 920-921,922	16	Chicago	600-611	10	Pittsfield	012	11
San Francisco 940-944	20	Kankakee	609	6	Springfield	010-011,013	11
San Jose 950-95t	20	Peoria	612-616	1
S. Barbara 930-931, 934, 939	12	Springfield	625-627	4	MICHIGAN
Stockton 952-954	14	Rural Illinois	620-624, 628-629	1	Detroit	480-483	10
					Flint	4R4-485	12
COLORADO		INDIANA			Grand Rapids	493-495	8
Coo. Springs 808-809,812	6	Bloomington	474-475, 472, 470	4	Jackson	492	6
Denver 800-807,816	8	Evansville	471, 476, 477	3	Kalamazoo	490-491	13
Grand Junction 813-815	3	Fort Wayne	467-468	S	Lansing	488-489	9
Pueblo 810-811	2	Gary	463-464	6	Saginaw 486r487, 496-499		7
		Indianapolis	460-462	7
CONNECTICUT		Kokomo	469	6	MINNESOTA
Hartford 060-062,067	15	Lafayette	479	4	Duluth 556-558, 564-S67		8
New Haven 063-066, 068-069	16	Muncie	473	6	Minneapolis-St. Paul 55O-554		11
		South Bend	4b3-466	7	Rochester 559-561		14
		Terre Haute	478	3	St. Cloud 562-563		7
DELAWARE Wilmington 197-l99	14
DISTRICT OF COLUMBIA		IOWA Cedar Rapids	322-524	4
		Davenport	525-528	2
All 200-205	12	Des Moines	500-503, S08	3
		Dubuque	520-521	2
		Sioux City	510-516	I
		Waterloo	506-507	2

TABLE OF AREA RATINGS (CONT.)

STATE/CITY ZIP	RATE	STATE/CITY ZIP	RATE	STATE/CITY ZIP	RATE
MISSISSIPPI		OHIO		TEXAS
All 386-397	2	Akron 442-443	8	Abiline 795-797	2
		Canton-Massillon 446-447	4	A marilla 790-792	3
MISSOURI		Cincinnati 450-452, 456	7	Austin 786-789	3
Kansas City 640-647	7	Cleveland 440-441	8	Beaumont 774-778	5
Springfield 636-639, 6S4-658	1	Columbus 430-433	7	Brownsville -McAllen 785	2
St. Louis 630-635, 650-652	5	Dayton-Springfield 453-455	7	Corpus Christi 783-784	3
		Mansfield 448-449	3	Dallas 750-753, 768	6
MONTANA		Steubenville 437-439,457	3	El Paso 798-799	6
Billings 590-595	5	Toledo 434-436,458	8	Fort Worth 760-764	7
Missoula 595-599	5	Youngstown 444-445	7	Houston 770-773	8
				Longview 754-757	4
NEBRASKA		OKLAHOMA		Lubbock 793-794	3
Lincoln 683-685	6	Enid 737-739,746	l	San Antonio 780.783, 769	2
Omaha 680-682	8	Muskogee 744-745, 747, 749	2	Victoria 779	1
Rural Nebraska 685-699	1	Oklahoma City 730-731,	4	W aco 765-767, 7-58-759	1
		734-736,748		Wichita Falls 763	1
NEVADA		Tulsa 740-743	3
Las Vegas 889-891	13			UTAH
Reno 891,894-898	12	OREGON		All 840-847	6
		Eugene 974	12
NEW HAMPSHIRE		Medford 975-976	8	VERMONT
All 030-039	9	Portland 970-972,978-979	12	All	7
		Salem 973,977	8
				VIRGINIA
NEW JERSEY		PENNSYLVANIA		Charlottesville 220-229	9
Atlantic City 082-084	9	Altoona 166-168	6	Lynchburg 239,245	4
Newark 070-081	12	Eire 160-165	6	Norfolk 233-235	1
Trenton 085-089	10	Harrisburg 170-172, 169, 177-179	9	Richmond 230-232, 236-219	6
		Johnstown I55-159	4	Roanoke 240-244,246
NEW MEXICO		Lancaster 173-176	7
All 870-884	4	Philadelphia 190-195	13
		Pittsburgh 150-154	7	WASHINGTON
		Scranton 180-189	4	Olympia 985	14
NEW YORK_				Seattle 980-982	14
Albany 120-126	3			Spokan 990-994	11
Binghamton 137-139, 127	5	RHODE ISLAND		Tacoma 983-984	11
Buffalo 140-143	7	All	11	Yakima 986-989	10
Elmira 148-149	3
Glen Falls l28-129	3	SOUTH CAROLINA		WEST VIRGINIA
Jamestown 147	3	Charleston 294,299	5	Charleston 250-254, 258-259	5
New York 101-119	22	Columbia 290-292.298	6	Huntington 255-257, 247-249	7
Rochester 144-146	7	Florence 295	3	Parkersburg 251-268	3
Syracuse 130-132	6	Greenville 293, 295-297	5	Wheeling 260	1
Utica 133-136	3
		SOUTH DAKOTA		WISCONSIN
NORTH CAROLINA		Rapid City 574-577	2	Green Bay 541-.543, 549	16
Asheville 287-289	4	Sioux Falls 570-574	5	La Crosse 546-547	4
Charlotte 280-282	6			Madison 534-539	8
Fayetteville 283	2	TENNESSEE		Milwaukee 530-534	5
Greensboro 270-274 0 z70-274	7	Chattanooga 373-374	5	Wassau 544-545,548-549	7
Hickory 286	3	Jackson 382-384	3
Raleigh 275-277	7	Johnson City 376	4	WYOMING
Rocky Mount 278-279	5	Knoxville 377-379	4	All 820.831	4
Wilmington 284-285	6	Memphis 380-381	3
		Nashville 370-372	7
NORTH DAKOTA
Bismark 583-588	1
Fargo 580.582	6

Requisite Data,Work Terms and Fees

Requisite Data

Because the methodology involves both a look back and a look forward,these items are needed:

• Claims and census for prior year (at least nine months) (aggregate tracking report, e.g.); also proposed plan costs (spread sheet with an indication of the option selected, e.g.).
• Selected benefits (dental, vision, STD, e.g.) should be indicated.
• If multiple plan options are involved, the critical SPD pages so describing such optional benefits as well as the census by option are needed.
• If multiple census terms are used, a breakdown of such census by tier is needed.
• Indication of any lasers or aggregating specific.

Work Terms

One or two day turnaround is expected; communication by fax or e-mail is preferred; vendor is the client of Self-Funding Actuarial Services, Inc. (and not the employer). No extra charge for phone calls, corrections, rework, etc.

Compelling Reasons to Use the Annual Actuarial Report

The compelling reasons why the self-funded plan sponsor and/or its vendors or practioners should consider using the Annual Actuarial Report are these:

• The COBRA law does clearly say that COBRA premiums should be actuarially determined.
• Only by using such Report can the plan maximize its COBRA rates without any exposure to an ERISA/EEOC/DOL/IRS or other potential legal liability.
• The COBRA premiums are a by-product of the Annual Actuarial Report which Report plays a greater role in the process; i.e. the Report recognizes the self-funded plan to be a miniature insurance company and treats it accordingly.
• Legitimized COBRA premiums are consistent from year to year and comfortably give the plan the basis if it wishes of funding, participant contributions, reserves, Monte Carlo Simulations, e.g.
• Self-Funding Actuarial Services, Inc. can usually determine the critical results quicker and less expensively than can the employer or any of the plan’s practitioners or vendors.
• By having the Annual Actuarial Report provided for the plan through a vendor, the advantages and safety of single-stop shopping is retained without the loss of actuarial independence.