9 Financial Benefit Discussion Points for Upcoming Connecticut Municipal Budget Season

As your administration responds to community and employee health and safety needs with the evolving coronavirus pandemic, public entities must understand and plan for the long-term impact while having limited financial mitigation solutions due to the collective bargaining environment.

The question on everyone’s mind — what impact will the pandemic have on our upcoming renewals and budget cycle?

Here are 9 financial benefit discussion points for the upcoming budget season:

1. Premium Credits for Fully-Insured

   What lines of coverage are applicable, for how much and what months will these be credited?

2. IBNR (Incurred But Not Reserved) and Reserve Calculation Methodology for Self-Insured

   Does the COVID claim fluctuation pattern affect utilized values and have there been any “correction” assumptions applied? What checks and balances are being applied to ensure reserves are not artificially deflated?

3. Effects from Deferred versus Cancelled Treatment & an Increase of Gaps in Care

   What assumptions need to be made for deferred services versus cancelled services and what do greater gaps in care mean for cost in the short and long-term?

4. Increased Utilization of Alternative Services, e.g., Mail Order Pharmacy, Behavior Health Services & Telemedicine Visits

   Are these short-term solutions, or do we expect change of consumption patterns that need to be accounted for in budgeting?

5. Additional “Waves” from COVID-19

   What can this do to budgeted costs and how can you plan for them?

6. Industry-Related COVID Actuarial Assumptions

   Are there additional risk assumptions in projected costs for categories such as industry & population demographics?

7. “Grey Area” in How Insurance Carriers View Risk and How Much will be Assumed as a Safety Net to Cover Exposure

   Each carrier underwrites their block of business differently and have different starting places for loss ratios, risk tolerance levels, COVID downward pressure and how they blend “manuals” in with their groups who are not of credible size on their own among other factors. How does your carrier assumptions affect your health plan?

8. Stop-Loss or Pooling-Point Assumptions

   Understanding the likelihood of COVID claims hitting stop-loss or pooling point levels and what is the effect of that?

9. Overtime Affecting Ancillary Coverage Premium Values

   Have earnings, definitions and premium calculation assumptions been reviewed to ensure volume is being calculated and paid correctly, or need adjustments and therefore budget adjustments?

For additional insights and guidance in understanding the effect COVID-19 has on your budget, be sure to visit our COVID-19 Health Plan Cost Impact Tool. With this calculator, you can better understand the financial impact of COVID-19 on your employee health plans and your organization’s financial outlook for the next 18-24 months.

We are here to help you navigate these uncertain times. Please reach out to your OneDigital Consultant with any questions you may have.