Minnesota Administrative Rules
Agency 120 - Commerce Department
Chapter 2740 - COMPREHENSIVE HEALTH INSURANCE
ACTUARIAL EQUIVALENCE OF QUALIFIED PLANS AND QUALIFIED MEDICARE SUPPLEMENT PLANS
Part 2740.9991 - EXAMPLE I

Universal Citation: MN Rules 2740.9991

Current through Register Vol. 49, No. 27, December 30, 2024

Subpart 1. Use of actuarial equivalence test.

A. Question: Is the following plan actuarially equivalent to any Minnesota qualified plan?

Surgery Includes Assistant Surgeon and Administration of Anesthesia
Deductible: $100
Coinsurance: 80/20
Maximum: $250,000
Maternity: Any complications
Student dependents: To age 23
Limits on specified benefits Outpatient mental limited to Minnesota
Required benefits --
Excluded care Home health care
Out-of-pocket limit $3,000 per year
Coordination of benefits Yes, but no COB for no-fault.

B. Answer (calculated January 1, 1985): test result is 1186 points. This plan is a Minnesota qualified plan number 2.

Subp. 2. Worksheet.

Test for actuarial equivalence other than Medicare supplement plans.

A. Worksheet.

Major Medical
Subparts of part 2740.9964 Benefit Basic Superimposed Comprehensive
1. Hospital room and board 363
2. Hospital extras 480
3. Surgery 243
4. Physician care; home, office 215
5. Physician care; hospital 51
6. Maternity 25
7. Diagnostic X-ray and lab 105
8. Drugs and medicine 100
9. Radioactive therapy 15
10. Nursing/convalescent facility 16
11. Home health care 0
12. Physical therapy 10
12. Oxygen 4
12. Prostheses 5
12. Durable medical equipment 5
12. Second opinion surgery 2
12. Private duty nursing 2
12. Ambulance 3
13. Hospital room and board in full
14. All hospital expenses in full
15. Major medical maximums -12
Subtotal reasonable and customary medical services 1632
16. Deductible -138
16. Coinsurance -299
Subtotal net of deductible and coinsurance 1195
17. Adjust (comb. medical/dental ded.)
18. COB/No-fault -48
19. Limit on "out-of-pocket" expenses 35
20. Well baby care
21. Emergency and supplemental accident
22. Student dependents 4
23.-25. Superimposed major medical
Grand Total 1186
Combined basic and superimposed XXX XXX

Equivalent to Minnesota qualified plan number __2__
nonqualified ______
Date _____ By _____

B. Miscellaneous calculations.
(1) The maximum in the policy ($250,000) divided by the COMP factor (1.121) is $223,015. This is 82.01 percent of the difference between the $100,000 and $250,000 maximums in part 2740.9964, subpart 15. The points would be minus 27 plus .8201 times 15 or -14.70 points.

(2) The deductible in the policy ($100) divided by the COMP factor (1.121) is 89.21. This is 78.41 percent of the difference between the $50 and $100 deductibles in part 2740.9964, subpart 16. Points deducted for the deductible would be 85 plus .7841 times 85 or 151.65. Since the total points in the policy before the deductible is significantly less than 1800, multiply 151.65 by (1632/1800). The result is 137.50.

(3) The out-of-pocket maximum is $3,000. The maximum claim when the out-of-pocket is reached is $14,600. This divided by the COMP factor (1.121) is 13,024. This is 10.29 percent of the difference between the $13,000 and $14,400 maximum claim when out-of-pocket is reached. The adjustment for the out-of-pocket limit is 36 minus .1029 times 6 or 35.38.

Statutory Authority: MS s 62E.09

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