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Old 10-20-2017, 03:00 PM
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Bill McKay Bill McKay is offline
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Default IBNR and GAAP for self funded employers

This is not my area of expertise so I didn't know how to answer when I was asked about how a self funded employer can change their accruals (for medical claims) under GAAP and how the IBNR calculation the TPA provided conforms to GAAP.

I thought GAAP was something the employer's accountants would worry about more than the TPA. But i'm uneducated on this, apparently.
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Old 10-20-2017, 04:41 PM
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Originally Posted by Bill McKay View Post
This is not my area of expertise so I didn't know how to answer when I was asked about how a self funded employer can change their accruals (for medical claims) under GAAP and how the IBNR calculation the TPA provided conforms to GAAP.

I thought GAAP was something the employer's accountants would worry about more than the TPA. But i'm uneducated on this, apparently.
The accounting people would do this by making a data entry. What was the question again?
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Old 10-20-2017, 06:06 PM
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Question is probably more about how it can change the accrual without being asked about it by some auditor.
The answer is to have an actuary do it, and sign that it is an accurate estimate.
In order for him to do that, he'd usually want to make sure it was an accurate estimate.

Check GAAP guidelines for IBNR. No, it's not very helpful (I just googled quickly). Need to note any change in methodology ("The CEO says so" is not a valid methodology) and why it results in a more accurate estimate.

Assuming the TPA is providing an accurate estimate is merely passing the buck, and that should be fine for most companies. An actuary has probably done that work, and has certified the estimate.
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Old 10-23-2017, 10:15 AM
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The accounting people would do this by making a data entry. What was the question again?
Exactly.
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