EXAMPLE III

Subpart 1. Use of actuarial equivalence test. A. Question: Is the following plan actuarially equivalent to any Minnesota qualified plan? Hospital: $80 per day, 120 days, $2,000 extras. Surgery: $1,500 maximum surgical schedule, add ten percent for administration of anesthesia. Coordination of benefits Yes, does not include no-fault Superimposed major medical: Deductible: $200 corridor per calendar year Coinsurance: 80/20 Maximum: $250,000 Maternity: Any complications Student dependents: No Out-of-pocket limit: $3,000 Excluded care: Home health care and skilled nursing care Limits on specified benefits: 1. Room and board $200 less basic benefits. Unlimited days Coordination of benefits Yes, does not include no-fault B. Answer (calculated January 1, 1985): test result is 1147 points. This plan is a Minnesota qualified plan number two. Subp. 2. Worksheet. A. Test for actuarial equivalence other than Medicare supplement plans. Major Medical Subpart of part 2740.9964 Benefit Basic Superimposed Comprehensive 1. Hospital room and board 128 -26 2. Hospital extras 290 3. Surgery 114 4. Physician care; home, office 5. Physician care; hospital 6. Maternity 7. Diagnostic X-ray and lab 8. Drugs and medicine 9. Radioactive therapy 10. Nursing/convalescent facility -13 11. Home health care -6 12. Physical therapy 12. Oxygen 12. Prostheses 12. Durable medical equipment 12. Second opinion surgery 12. Home care nursing 12. Ambulance 13. Hospital room and board in full 14. All hospital expenses in full 15. Major medical maximums Subtotal reasonable and customary medical services 532 16. Deductible 16. Coinsurance Subtotal net of deductible and coinsurance 17. Adjust (comb. medical/dental ded.) 18. COB/No-fault 21 19. Limit on "out-of-pocket" expenses 20. Well baby care 21. Emergency and supplemental accident 22. Student dependents 23.-25. Superimposed major medical 681 Grand Total 511 636 Combined basic and superimposed 1147 XXX XXX Equivalent to Minnesota qualified plan number __2__ nonqualified ______ Date _ By _ B. Miscellaneous calculations. (1) Since the room and board limit is less than the ASP factor, the number of points will equal 351 times the ratio of 80 to 220. (2) The $2,000 maximum divided by 1.155 is 1731.60. This is 73.16 percent of the difference between the $1,000 and $2,000 maximums in the table. The points would be 217 plus .7316 times (317 - 217) or 290.16 points. (3) The surgical schedule is the same as in example II in part 2740.9992 value. The value of the table is 1840.1 for the $1,500 maximum. The points excluding administration of anesthesia is 243 times 1840.1 divided by 4320.00 or 103.51 points. The administration of anesthesia would add 10.35 points. (4) The $200 corridor deductible would be adjusted before entering part 2740.9964 , subpart 24. The adjusted deductible would be 200 divided by 1.121 or 178.41. Since this is 78.41 percent of the way between the $100 and $200 deductibles, the points would be 740 minus .7841 times (740-665) or 681.19 points. (5) Home health care and skilled nursing home care are excluded. Therefore we should deduct 80 percent of their points shown in part 2740.9964 , subparts 10 and 11. (6) Hospital room and board is limited to $200 per day less what the basic benefit pays. The adjustment should equal .8 (363 times 20 divided by 220) or 26.4 points.