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Zane Benefits Publishes New Information on Actuarial Value (AV)

Park City, Utah (PRWEB) January 31, 2013

Today, Zane Benefits, Inc. published new information on Actuarial Value (AV) and Health Care Reform. Zane Benefits, which provides comprehensive and flexible alternatives to traditional employer sponsored health benefits, is the leader in defined contribution and health reimbursement accounts.

According to Zane Benefits’ website, beginning in 2014, health care reform requires health insurance plans in the individual and small group markets to meet certain actuarial value (or "metal") levels. These “Metal levels” are intended to allow consumers to compare plans with different levels of coverage for essential health benefits (EHB). The levels include:

  •     Bronze (60% actuarial value)
  •     Silver (70% actuarial value)
  •     Gold (80% actuarial value)
  •     Platinum (90% actuarial value)

What is Actuarial Value (AV)?

According to Zane Benefits’ website, Actuarial value is a measure of the percentage of expected health care costs a specific health plan will cover for the "standard" population. Actuarial value is generally calculated using the ratio of:

the total expected payments by the plan for essential health benefits

divided by:

the total expected costs of the "standard" population for essential health benefits

For example, a plan with a 70 percent actuarial value would be expected to pay, on average, 70 percent of a standard population’s expected medical expenses for essential health benefits. The individuals covered by the plan would be expected to pay, on average, the remaining 30 percent of the expected expenses in the form of deductibles, co-payments, and coinsurance.

The exact process for determining a "standard" actuarial value across multiple plans has yet to be finalized. However, HHS has proposed rules governing the calculation of actuarial value.

Proposed Rules for a Standardized Actuarial Value (AV)

According to Zane Benefits’ website, The Department of Health and Human Services (HHS) has provided information on actuarial value standards in several phases:

  •     On December 16, 2011, HHS released a bulletin that outlined an intended regulatory approach for defining essential health benefits, including a benchmark-based framework.
  •     On January 25, 2012, HHS released a list of the largest three small group market products by state, which were updated on July 2, 2012.
  •     On February 17, 2012, HHS further clarified the approach to essential health benefits through a series of Frequently Asked Questions (FAQs)
  •     On February 24, 2012, HHS published a bulletin outlining an intended regulatory approach to calculations of actuarial value and implementation of cost-sharing reductions
  •     On July 20, 2012, HHS published a final rule authorizing the collection of data to be used under the intended process for states to select from among several benchmark options to define essential health benefits.
  •     On November 20, 2012, HHS published a proposed rule that outlines health insurance issuer standards related to the coverage of essential health benefits and the determination of actuarial value.

To standardize the calculation of actuarial value for health insurance issuers, HHS has proposed utilizing a publicly available "Actuarial Value Calculator". The idea is that health plans can use this calculator to determine actuarial values based on a national, standard population determined by HHS.

Click here to read full article.


About Zane Benefits

Zane Benefits was founded in 2006 to provide a revolutionized SaaS (Software-as-a-Service) administration platform ("ZaneHRA") for Health Reimbursement Arrangement (HRAs) and defined contribution healthcare. The flagship software provides a 100% paperless administration experience to employers and insurance professionals that want to offer better health benefits without a traditional group health insurance plan at lower costs. For more information about ZaneHRA, visit

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