Shared funding: financial summary guide

Use this monthly report to gauge how closely your actual claims experience matches what was projected at the start of the plan year.

Financial Summary at-a-glance

This report shows you:

• The number of employees and dependents enrolled each month
• Expected (Claims Target) versus actual paid claims
• Our administrative fee, including premium for stop-loss coverage
• The dollar amount of claims exceeding the expected per-person limit we agreed upon (specific and Maximum Claim Liability pooling point)
• Claims over 50% of the specific pooling point
• Percentage of maximum liability reached year-to-date

Walk through the Financial Summary

Terms

• Max liability factor - The percentage of projected claims at which Priority Health will begin to pay all claim costs for your entire group (example: 120% or 125%)¹
• Specific - The limit Priority Health will cover for any individual's claim costs before you become responsible

Column headings

• Enrolled employees - The number of employees participating in the plan for a given month²
• Enrolled members - The total number of participating employees + their covered dependents for a given month
• A: Claims target - Projected claims expected for your group
• B: Administrative fee - Our fee for administering your health plan³
• C: Specific and aggregate pooling premium - The insurance premium you pay to protect against catastrophic loss on claims (individual & total group)
• A+B+C: Total premium - Premium paid for the month
• D: Actual paid medical claims - After discounts and adjustments. Claim payments are based on the month paid, not the date of service.
• E: Actual paid Rx claims - The dollar amount paid after discounts and adjustments⁴
• F: Claims over specific pooling point - The dollar amount of claims that exceed the per-person limit
• D+E+F: Actual paid claims total - Actual paid claims, less specific stop-loss adjustments (including premium taxes)

Bottom of page

• Run-out months - The three months after the plan year ends for which we will continue to pay incurred claims
• PEPM (Per Employee Per Month) - Total cost divided by the number of employees⁵
• Paid claims plus estimated outstanding claims (Incurred But Not Reported) - Paid claims plus the estimated amount of claims which are not yet reported but may occur during the plan year

Page two — year-to-date summaries

Year-to-date claim liability summary (YTD, average, and PEPM)

• Amount over claim target (w/IBNR) - A summary of individual claims at 50% or more of the pooling amount (members are identified by confidential claimant codes only)
• Maximum claims liability - The YTD amount for which you are responsible
• Amount over max claims liability with IBNR - The projected amount that may exceed your maximum claim liability when IBRN is considered. Priority Health will be responsible for this amount.

Year-to-date claims target summary

• Actual paid claims as a % of claims target - The actual claims paid and a with-IBNR estimate (Columns D+E+F compared to the target Column A)
• Actual paid claims as a % of maximum claim liability - The actual paid claims as a percentage of your maximum liability

Call your account manager with questions about terms and calculations.

¹Includes claims incurred during this contract year beginning with effective (or renewal) date

²As of 15th of month. Retroactive additions/deletions reflected as adjustments in month of effective date

³See premium billing statement for detailed information

⁴Adjustment made to previously paid claims reflected in month adjusted and in original payment month.

⁵Calculated using member totals. Calculations may be distorted when ancillary coverage is in effect.