2020 Special Session I

Budget Amendments - HB5005 (Committee Approved)

View Budget Item
View Budget Item amendments

Actuarial Review of the State Employee Health Plan (language only)

Item 84 #1h

Item 84 #1h

Administration of Health Insurance


Page 16, after line 3, insert:

"The Department of Human Resource Management (DHRM) shall conduct an actuarial audit of the State Health Insurance Program. DHRM shall select on a competitive basis, and employ on a consulting basis, an actuarial firm for the fulfillment of the duties set forth in this section. DHRM will be required to provide a report to the Governor and the Chairs of the House Appropriations and Senate Finance and Appropriations Committees by October 15, 2021. The audit shall provide a peer review of the self-funded plan benefits' liabilities and contribution strategies. Specifically, the audit shall: (1) review the reasonableness of actuarial methods, and accuracy of reports produced by the actuary; (2) assess the data and methods used to establish rates; (3) evaluate the methods and assumptions used to estimate recent incurred but not reported (IBNR) liabilities, and other reserves/margins; (4) review and comment on actuarial models used to estimate the impact of plan changes, develop rates and budget projections, and monitor claims experience; (6) conduct a comparison of fully insured rates to those available in the marketplace; and (7) review any valuation results computed under GASB 43 and 45."


(This amendment directs DHRM to hire an outside actuarial firm to conduct a review of the assumptions used to set rates for the State Employee Health Insurance Plan and balances maintained in the Health Insurance Fund (HIF).)