Health plan funding analysis
87 employees · 179 covered members · manufacturing · OH / IN / KY
Prepared by Sample Broker Partners · plan year effective 2026-10-01
Contents
Date
2026-07-01
Report
CR-2607-014
Engine
v0.1.0
Seed
8151
Every number in this report is reproducible from the report ID, engine version, and seed above. Illustrative projection for discussion purposes. Not an actuarial opinion, insurance advice, or a quote. Outputs depend on user inputs and publicly available data.
Powered by Corriden · corriden.com
§1 — Executive summary
$214,148
expected annual savings vs. the renewal
87.5%
of simulated years beat the renewal
$2.18M
contractual worst case under the quoted stop-loss terms
Expected annual cost per arrangement; the full outcome distributions are in §5.
Staying fully insured costs $1.98M at the quoted renewal; self-funding the same plan design is expected to cost $1.77M, with 9 of 10 simulated years landing between $1.55M and $2.05M. The +14.8% renewal increase clears this group’s break-even threshold of +2.4% — and the risk-adjusted threshold of +7.8% at the selected P75 tolerance. Sections 2–10 show every factor behind those statements.
§2 — Group profile
The projection is built from this census — not from a book average.
| Tier | Employees | Members | Current / mo | Renewal / mo |
|---|---|---|---|---|
| Employee | 41 | 41 | $960 | $1,102 |
| Employee + Spouse | 15 | 30 | $1,960 | $2,250 |
| Employee + Children | 12 | 34 | $1,780 | $2,043 |
| Family | 19 | 74 | $2,830 | $3,249 |
Totals: 87 employees · 179 covered members. Premiums are per-employee tier rates.
Average employee age 42.3 · average member age 31.5 · demographic factor 1.08× vs. book 1.00×
| State | Employees |
|---|---|
| Ohio | 61 |
| Indiana | 14 |
| Kentucky | 12 |
The group runs slightly older than book average — the 1.08× demographic factor in §3 reflects exactly this census, and nothing else. Geography enters through state-level area factors, weighted by the employee counts at left.
§3 — Expected claims projection
Carriers black-box this arithmetic. Every factor below is printed with its public data source.
| Step | Factor | Running PMPM | Source |
|---|---|---|---|
| Base cost — reference PMPM | — | $612.00 | DS-3, DS-5 |
| Age / gender factor — Group skews slightly older than book average. | × 1.08 | $660.96 | DS-4 |
| Area factor — OH/IN/KY blend, weighted by employees. | × 0.96 | $634.52 | DS-4 |
| Plan design (actuarial value) — Richer than reference design ($1,500 embedded deductible, 80% coinsurance). | × 1.06 | $672.59 | DS-1 |
| Trend to plan-year midpoint | × 1.065 | $716.31 | DS-7 |
Sources are itemized in the §10 registry. Factors shown at display precision; the chain multiplies at full precision.
24 months of the group's own claims experience, weighted by limited-fluctuation credibility.
| Component | PMPM | Weight |
|---|---|---|
| Group experience rate (trended) | $923.90 | Z = 0.264 |
| Manual rate (Exhibit 3.1) | $716.31 | 1 − Z = 0.736 |
| Blended projection | $771.11 |
Z = √(174 life-years ÷ 2500 full-credibility standard). The Z is shown, not hidden — check the work.
Expected incurred claims, plan year: $1,656,344 = $771.11 PMPM × 179 members × 12 months
§4 — Funding arrangement comparison
Fixed vs. variable split shown line by line. Stop-loss figures are the quotes you supplied — Corriden never prices stop-loss.
| Line item | Type | Annual |
|---|---|---|
| Renewal premium — carrier renewal quote (sample) | Fixed | $1,982,148 |
| Expected annual cost | $1,982,148 |
| Line item | Type | Annual |
|---|---|---|
| Maximum claims funding | Variable | $1,378,000 |
| Administration | Fixed | $156,000 |
| Stop-loss (bundled) — carrier-quoted, bundled (sample) | Fixed | $356,000 |
| Expected annual cost | $1,890,000 |
Surplus refund in a good year: up to ~$180K of unspent claims funding, per carrier terms.
| Line item | Type | Annual |
|---|---|---|
| Expected claims, net of specific reimbursements — blended projection (§3) | Variable | $1,656,344 |
| TPA / administration — $42.00 per employee per month | Fixed | $43,848 |
| Specific stop-loss premium — user-entered quote (sample) · $61.00/EE/mo · $75K specific deductible | Fixed | $63,684 |
| Aggregate stop-loss premium — user-entered quote (sample) · $3.95/EE/mo · 125% corridor | Fixed | $4,124 |
| Expected annual cost | $1,768,000 |
In a P25 year the plan spends ~$113K less than expected; the group keeps it.
The structural difference: fully insured, every dollar is fixed and none comes back. Level-funded caps the year and refunds part of a good one. Self-funded pays actual claims — the group keeps every dollar not spent, and stop-loss (on the quoted terms above) caps the bad years. §5 quantifies how often each case occurs.
§5 — Monte Carlo risk analysis
10,000 simulated plan years. The dashed line is the quoted renewal — every band is judged against it.
Outer band P5–P95 · inner band P25–P75 · tick = median · dot = mean · red = P95→P99 tail.
| Arrangement | P5 | P25 | P50 | P75 | P95 | P99 |
|---|---|---|---|---|---|---|
| Fully-insured | $1.98M | $1.98M | $1.98M | $1.98M | $1.98M | $1.98M |
| Level-funded | $1.75M | $1.87M | $1.89M | $1.89M | $1.89M | $1.89M |
| Self-funded | $1.55M | $1.66M | $1.74M | $1.86M | $2.05M | $2.18M |
Fully-insured: Premium is fixed regardless of claims. Level-funded: Outcomes capped at the funded maximum; low percentiles reflect surplus refunds.
The fully-insured premium never moves. The level-funded band is one-sided — capped at the funded maximum, refunding good years. Self-funding carries the widest band, and still beats the quoted renewal in 87.5% of simulated years.
§5 — Monte Carlo risk analysis
The question is not whether a bad year is possible — it is whether the worst case is affordable and how often the good case pays for it.
87.5%
of simulated years beat the renewal
$214,148
expected annual savings vs. renewal
$2.12M
CTE95 — average of the worst 5% of years
$2.18M
maximum plan exposure (agg + fixed)
| Statistic | Value | Reading |
|---|---|---|
| Probability self-funding beats the renewal, year 1 | 87.5% | ≈ 7 years in 8 |
| Expected annual savings vs. renewal | $214,148 | the expected-value case for self-funding |
| CTE95 — average of the worst 5% of years | $2,120,000 | what a genuinely bad year looks like |
| Maximum plan exposure (agg attachment + fixed) | $2,182,086 | the contractual worst case — see §7 |
Self-funded band P5–P95 (inner P25–P75) with the renewal, CTE95, and the contractual maximum marked.
How to read this page with a CFO: a bad year is always possible. What matters is that the worst case is a known, affordable number — and that the ordinary case pays for the risk many times over. Both numbers are on this page, and §7 shows the contract term that caps the downside.
§6 — Indifference analysis
Year-1 basis, derived from the §5 cost distribution. Current premium $1,726,680. Multi-year probabilities appear in §8.
At any renewal increase above +2.4%, self-funding has positive expected value for this group. At your selected risk tolerance — still breaking even at the P75 outcome — the threshold is +7.8%. The quoted renewal of +14.8% clears both.
The inverse is the negotiation weapon: a fully-insured premium at parity with expected self-funded cost — $1,768,000 — would make staying fully insured rational on expected value. Carriers sharpen pencils when they know the math is being checked.
§7 — Cash flow & maximum exposure
Self-funded outlay varies month to month; the premium does not. Volatility is the price of keeping good-year dollars.
Aggregate stop-loss (quoted terms) attaches at 125% of expected claims.
The #1 employer fear, answered with a contract term: even if claims blow through every projection, the plan’s contractual maximum under the quoted stop-loss terms is $2.18M — about 10% above the renewal premium.
§8 — Multi-year view
Cumulative savings vs. staying fully insured. Above the line, self-funding is ahead; the red whisker is the honest downside. Medians shown; the expected (mean) year-1 saving is the $214K in §1.
| Horizon | Pr(SF ≤ FI) | SF median | FI cumulative |
|---|---|---|---|
| 1 year | 87.5% | $1.74M | $1.98M |
| 3 years | 84% | $5.57M | $6.34M |
| 5 years | 82% | $9.92M | $11.29M |
Fully-insured renewals are assumed to grow with trend; actual renewals depend on carrier behavior and the group's experience.
Trend uncertainty persists across years — a high-trend world stays expensive in every year — so the probabilities above do not assume independence.
§9 — Plan design what-ifs
Actuarial-value deltas from published continuance tables; impact shown per funding arrangement.
| Scenario | Design change | AV Δ | SF annual Δ | FI premium-equiv. Δ |
|---|---|---|---|---|
| Raise the deductible | $1,500 → $3,000 embedded deductible | -0.021 | −$46,000 | −$52,000 |
| Move to an HSA design | $3,000 HDHP with a $750 employer seed | -0.008 | −$18,000 | −$21,000 |
| Trim coinsurance | 80% → 70% coinsurance after deductible | -0.013 | −$29,000 | −$33,000 |
Negative deltas reduce plan richness and cost; member cost-sharing rises correspondingly. Level-funded impacts depend on carrier re-rating and are quoted on request.
Paired bars: self-funded impact and the fully-insured premium-equivalent.
Plan design and funding arrangement are separate decisions, and this page keeps them separate: each scenario shows what the design change alone is worth under self-funding and what it would be worth as a fully-insured premium concession. Either lever can be pulled independently.
Scenarios are computed against this group’s continuance profile, not book averages. Additional scenarios are available on request.
≈ $260K
first-year impact of stacking the deductible move with self-funding ($46K on top of the $214K funding change)
§10 — Assumptions & methodology
The full methodology is published at corriden.com — confidence through transparency.
| Factor | Value | Running PMPM | Source |
|---|---|---|---|
| Base cost — reference PMPM | — | $612.00 | DS-3, DS-5 |
| Age / gender factor | × 1.08 | $660.96 | DS-4 |
| Area factor | × 0.96 | $634.52 | DS-4 |
| Plan design (actuarial value) | × 1.06 | $672.59 | DS-1 |
| Trend to plan-year midpoint | × 1.065 | $716.31 | DS-7 |
Credibility: Z = 0.264 on 174 life-years (full credibility at 2500). Blended PMPM $771.11.
Expected claims
Manual rate built from public reference data (base PMPM × demographic × area × plan-design × trend), blended with the group's own experience by limited-fluctuation credibility. Every factor appears in §3 with its source.
Simulation
Claims are simulated as member-level frequency and severity draws across 10,000 plan years, with specific and aggregate stop-loss applied on the user-supplied quoted terms. Percentiles are empirical.
Trend uncertainty
Trend is drawn once per trial and persists across years within that trial — multi-year outcomes are correlated, which is why certainty does not automatically improve with horizon.
Indifference analysis
i* (expected value) is the renewal increase at which expected self-funded cost equals the fully-insured premium; i* (at the selected percentile) applies the same test at the chosen risk tolerance. Both are read from the simulated distribution.
Reproducibility
Every figure is reproducible from (inputs, engine version, seed) printed on each page. The same inputs and seed always produce the same report.
§10 — Assumptions & methodology
Every input traces to a named public source. Nothing in this report relies on proprietary black-box data.
| ID | Source | Used for |
|---|---|---|
| DS‑1 | CMS Actuarial Value Calculator (current final workbook + methodology) | Continuance tables; actuarial-value and plan-design factors |
| DS‑2 | SOA Group Medical Insurance Large Claims Database; SOA high-cost claimant studies | Large-claim tail calibration |
| DS‑3 | KFF Employer Health Benefits Survey (latest annual) | Base PMPM calibration; market context |
| DS‑4 | MEPS-IC premium tables by state; MEPS-HC consolidated microdata | Area factors; age/sex curve |
| DS‑5 | CMS National Health Expenditure, private insurance per-enrollee | Base PMPM cross-check |
| DS‑6 | SOA “Health Care Costs — From Birth to Death” (Yamamoto) | Age-curve shape validation |
| DS‑7 | PwC HRI medical cost trend; Segal Health Plan Cost Trend Survey (latest) | Trend assumption |
| DS‑8 | Federal ACA standard age rating curve | Age-factor validation bracket |
| DS‑9 | Published medical claim lag / completion patterns (public actuarial literature) | Completion factors; monthly claim pattern |
This report is decision-support analysis prepared for discussion between the plan sponsor and its advisors. It is not an actuarial opinion, not insurance advice, not legal or tax advice, and not an offer of insurance or a quote.
Stop-loss premiums, deductibles, and corridors used in this analysis are the quoted terms supplied by the user, reproduced as entered. Corriden does not produce stop-loss figures of any kind; actual coverage is governed solely by the carrier’s contract wording.
Projections are estimates with stated uncertainty. Actual claims experience will differ, and can differ materially, from any projection in this report. Decisions about plan funding remain with the plan sponsor and its advisors.
Census data underlying this analysis is de-identified: ages rather than birthdates, no names, no identifier-style fields. This sample report uses a synthetic census.
§10 — Assumptions & methodology
What this model deliberately does not capture. Printed in every Corriden report.
This is the report your CFO sees — with your logo on the cover.
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