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Slove the following: Your CEO challenges your recommendation as being overly simplistic. (d) (2 points) Describe: (i) the four major ways this situation is simplistic.

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Your CEO challenges your recommendation as being overly simplistic. (d) (2 points) Describe: (i) the four major ways this situation is simplistic. (i) ways you can improve your evaluation.(a) (2 points) List the data sources available for estimating medical claim costs in cach category: (i) federal government publications (ii) actuarial publications (iii) other external sources You are a health benefits actuary at a large employer. Your CEO has asked you to evaluate the following flexible option plan: Actual Plan Proposed Flexible Options Comprehensive Health Point-of-Service Major Medical Maintenance (POS) High Deductible Organization Indemnity (IDP) (MCC) In- Out-of- (HMO) Network Network Relative Benefit 1.00 1.15 1.05 0.95 0.65 Value Provider Discount 1.00 0.75 0.82 1.00 1.00 Savings Utilization Savings 1.00 0.91 0.96 1.00 1.00 Trend 1.15 1.11 1.12 1.15 1.17 Selection and 1.00 1.11 0.70 Antiselection 0.92 You are also given: . Prior year claims per employee: $9,500 . Projected network usage for POS option: D In network: 80% o Out-of-Network: 20% . Projected enrollment: D HMO: 35% O POS: 60% o High Deductible Indemnity: 5% (b) (2 points) Assess the impact on the claims cost of introducing the proposed flexible plan. Show your work. (c) (/ point) Recommend whether or not the proposed Flexible Plan should be implemented. Justify your

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