Reference no: EM131910643

Assuming 20% annual cost inflation, develop financial predictions for 4 years for each of the following: a) Making no changes to current insurance plan offerings b) Consolidating from 2 carriers with 2 PPO and 2 HMO options to 1 carrier offering 1 PPO and 1 HMO. Assume a 5% reduction in cost of the plan if only one carrier is used. (HINT: You will have to have two projections here – one for each carrier) c) Replacement of existing insurance options with a new consumer-driven health plan (CDHP). d) Replacement of existing plan financing with self-insurance financing for all insurance plan offerings. e) Changing existing employee contribution strategy from a fixed percentage to a value-based contribution strategy. 2) Calculate NPV for each of the options reviewed above assuming a 8% cost of capital rate. 3) Discuss which of the options you would recommend Old Tex select? Include in your discussion why you make this recommendation and what metrics you used to arrive at your recommendation.