What is actuarial value for the Affordable Care Act?

The ACA specifies that beginning in 2014 insurance newly sold to individuals and small businesses in an Exchange or otherwise must be at one of four actuarial value levels: 60% (a bronze plan), 70% (a sliver plan), 80% (a gold plan), and 90% (a platinum plan).

What is a good actuarial value?

The ACA and Actuarial Value Bronze plans can have actuarial values between 56% and 65%. Silver plans can have actuarial values between 66% and 72%. Gold plans can have actuarial values between 76% and 82%. Platinum plans can have actuarial values between 86% and 92%.

How do you calculate actuarial value?

Luckily, there is a simple actuarial value formula used to calculate the actuarial value. Remember, when you took all of the costs of all of the people under a given policy and found the average, we called that the Average Cost. So, the actuarial value formula is: [Actuarial Present Value] / [Average Cost]

What is an actuarial value of 60%?

Bronze = 60 percent of the actuarial value with respect to essential benefits. Silver = 70 percent of the actuarial value with respect to essential benefits. Gold = 80 percent of the actuarial value with respect to essential benefits. Platinum = 90 percent of the actuarial value with respect to essential benefits.

What is healthcare actuarial?

Using a blend of mathematics, statistics, and financial theory, a healthcare actuary is responsible for assessing future financial risk for health insurance companies. The majority of healthcare actuaries are employed by insurance companies and the rest by government health agencies.

Why are Silver plans better?

Silver plans fall about in the middle: You pay moderate monthly premiums and moderate costs when you need care. Important: If you qualify for “cost sharing reductions” (or “extra savings”) you can save a lot of money on deductibles, copayments, and coinsurance when you get care — but only if you pick a Silver plan.

Why do insurance companies use actuaries?

“The purpose of the Appointed Actuary role is to ensure that the board has unfettered access to expert and impartial actuarial advice and review, to assist with the sound and prudent management of an insurer and that the insurer gives adequate consideration to the protection of policyholder interests.

How often are actuarial valuations required?

every 3 years
Actuarial valuations of trust based defined benefit pension schemes are required every 3 years. The valuations will value the assets and liabilities at the date of the valuation.

How can you tell an Obamacare plan’s actuarial value?

You can tell an Obamacare plan’s actuarial value by its metal-tier. 1  Bronze health plans have an actuarial value of approximately 60%. Silver health plans have an actuarial value of approximately 70%. Gold health plans have an actuarial value of approximately 80%. Platinum health plans have an actuarial value of approximately 90%.

Do health insurance plans with better actuarial value have better cost sharing?

As a rule of thumb health plans with better actuarial value will have better cost sharing in exchange for higher premiums, however the exact cost sharing amounts and what services are covered by what amounts differs from plan to plan even within the same metal tier.

What is actuarial value?

The percentage of total average costs for covered benefits that a plan will cover. For example, if a plan has an actuarial value of 70%, on average, you would be responsible for 30% of the costs of all covered benefits.

What is the actuarial value of a bronze health plan?

Bronze health plans have an actuarial value of approximately 60%. Silver health plans have an actuarial value of approximately 70%. Gold health plans have an actuarial value of approximately 80%. Platinum health plans have an actuarial value of approximately 90%.