Contribution Health, a Crumdale Business Partner, has just published the latest version of their innovative and accurate online Actuarial Value Calculator —available at

The free online calculator is an attractive commercial alternative to the federal calculator and is available for occasional use or on a subscription basis with enhanced features as a strategic tool for single or multi-agency organizations.  The subscription version includes save and library features, multiple users, and batch uploads.  A research version for custom modification is available through the Contribution Health consulting division.

Why Is Actuarial Value Important?

The phrase “Actuarial Value” embedded in the 2010 Affordable Care Act raised awareness and interest in this concept.  Plans with a minimum Actuarial Value of 60% were considered sufficient to avoid penalties. Beyond any insurance reform laws, the ability for brokers and employers to easily make side-by-side comparisons of health insurance plans based on their actuarial value provides a great strategic advantage for plan modeling and financial planning of employee benefit plans.

A Powerful Advisement Tool For Brokers

Brokers who have discovered how to use actuarial value now use it as their primary plan advisement tool.  The mathematics of actuarial value opens opportunities for brokers, advisors, employers, and even ancillary vendors such as bankers and accountants to make useful observations and advice. It’s the measure nobody else uses that can make you look smarter than the other guy. Everybody likes to look smart.

A strategic approach for a broker is to lay out all their clients into a grid, show each employer where they stand and ask the employer where they would like to be compared to others.

Dual option and Triple option plans should be using actuarial value as the core planning tool to manage the spread of value and the contribution strategy.  Simple comparative information can immediately frame the debate for an employer in a much more meaningful way than in the past.  The first thing an employer needs to know is, “where do I sit compared to others?” Nothing could be simpler than saying, “here’s where you are, here’s where everyone else is”.

The Revolutionary Technology

The technology, unlike other models, presents a revolutionary approach that is based on re-pricing a “model office” of 300,000 claims per 10,000 covered participants.  The model office is based on average discounted and allowed charges in the employer-sponsored market published by the Health Care Cost Institute.  HCCI research data includes over 2.5 billion medical and prescription drug claims for approximately 40 million individuals.

The model essentially runs a claim adjudication routine similar to running an actual experience claim data set to see the impact of plan changes.  Testing of the online model shows an impressive correlation with the federal calculator within 1% using an array of plans, many with complex copay structures.

Get The Latest Insurance Resources & Updates

Learn more about Contribution Health’s AV Calculator and try it for free online. For the latest news from our partners and other helpful insurance tools and tips, check back to our blog frequently to stay updated.