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 Trust Matters, February 2016 

2016 much to look forward to

Fourth Circuit decision on Tasers

Wellness requirements for 2015

Employment law training

Supplemental medical insurance

Renewal applications -- Please return ASAP

30 day notice of non-renewal

Calendar

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2016 much to look forward to

As we are now two months into 2016 we are excited about what this year holds:

  1. We are making significant changes in our health benefits trust; changes that will result in more competitive rates and updated plan designs
  2. We will be offering for the first time within the Health Benefits Trust a supplemental medical product underwritten by Nationwide that allows you to improve coverage for your employees while reducing your cost
  3. We have made significant changes in our underwriting of the Property/Liability Insurance Trust, enabling us to be more competitive for new members, while current members continue to enjoy the favorable pricing and excellent value-added services-these changes will result in a savings of $450,000 to our current pool members
  4. Rates for the Workers’ Compensation Trust remain stable again this year
  5. We will be rolling out a specially designed program for police agencies that will allow a full assessment of their high liability risks, opportunity to be certified by RMS for those that qualify and enjoy rate credits as a result
  6. Our fourth annual police driver training will be held at the Charlotte Motor Speedway in June
  7. We will launch our online claims reporting tool for both the workers’ compensation and property/liability insurance trusts, making it easier for you to submit a claim and improve our ability to respond quickly and efficiently

There are several other initiatives I could mention, but hopefully you get the idea -- our staff here at the League is working hard to maintain the financial integrity of the pools, deliver value in the way of risk management programs and services, and provide the caring expertise you deserve in the handling of claims, provision of wellness services and underwriting.

Now is also the time that we gear up for renewals. You will receive information on program renewals by the end of March. We are pleased to announce that rates remain stable for Workers’ Compensation, reduced for Property and Liability, and well below trend (overall) for the Health Benefits Trust. Now is a good time to consider getting a quote from any of our three programs given our renewal rates, services, and strong financial position.

Spring meetings will be held in April at 7 locations across the state. We encourage you to join us as we have excellent news regarding rates for all three of your insurance trusts and are excited to tell you more regarding the program enhancements listed above. Additionally, we will provide training on how best to prepare for an active shooter either on your premises or in a public place, which certainly qualifies as our worst nightmare.

Fourth Circuit decision on Tasers

A U.S. Fourth Circuit Court of Appeals case related to the law enforcement use of Tasers was recently published. This case will likely have an impact on how our courts perceive the use of Tasers and how police use of force policies should be constructed.

Given the significance of the case and the impact on law enforcement, the North Carolina League of Municipalities Risk Management Services immediately prepared a communication for all police chiefs in our insurance pools. Chiefs were provided a summary of the Fourth Circuit case, recommendations for use of force policy language to comply with the court’s decision, and a video review of the case to share with officers. 

The case responsible for all this discussion is Armstrong V. The Village of Pinehurst, and it involves the use of Taser devices on a subject who was passively resisting officers who were executing an involuntary commitment order. The doctor indicated in the order that the subject was a threat to himself but did not describe him as being a threat to others.

As officers were trying to gain control of the subject, he reacted by sitting down and wrapping himself around a sign post. A total of six people, including three officers, struggled to remove Armstrong from the post while he continued to resist their efforts.  Armstrong was drive-stunned five separate times within a two minute period resulting in his increased resistance. After the unsuccessful Taser use, Armstrong was eventually taken under control by the officers and hospital staff. He was handcuffed and placed face down in the grass. A short time later Armstrong was found to be unresponsive.  Life-saving efforts were attempted, and Armstrong was transported to a hospital where he was later pronounced dead.

As a result of these events, the Appellant sued the officers involved pursuant to 42 U.S.C. 1983 claiming excessive force. As a result, summary judgment was granted to the officer-defendants which lead to the recent Fourth Circuit appeal.

Upon appeal, the Fourth Circuit upheld the finding of summary judgment based on qualified immunity. However, the Fourth Circuit was very clear in their findings that the officers used “unreasonably excessive force in violation of the Fourth Amendment”. 

Although this case involved a  use of force on a person that was being taken into custody for a mental commitment, and not a criminal matter, it will likely have an impact on criminal cases involving the use of Tasers. Based on the case brief and detailed analysis on Taser usage, the court is clearly looking for the use of Tasers to be proportional to the situation encountered and the level of threat to the officers or third parties.

Given that all future Taser use is subject to the Fourth Circuit’s review, Risk Management Services is recommending that departments immediately review their use of force policies to verify that they address the issues raised by the court. 

In addition to communications provided to chiefs, we are offering use of force training that includes a review of the Fourth Circuit’s decision.  The training was developed prior to the Armstrong decision and is available to members of our property and liability insurance pool. 

For additional information contact Tom Anderson, public safety risk consultant, at tanderson@nclm.org or 919-715-2573.

Wellness requirements for 2015

As you know the MIT Health Benefits Trust of NC has taken steps to lower healthcare costs and improve participant health. This is the second full year since implementing wellness requirements, and we are very pleased with the results. In 2013, we took a hard look at what was contributing to our escalating claims cost. To our surprise, we found that our participants were not receiving their annual physical or age appropriate cancer screenings even though the MIT covered them at 100 percent. 

Our status today is very impressive compared to where we were just a couple years ago before implementing these requirements. Previously, half of our medical participants did not get an annual physical, and 70 percent were not receiving their age appropriate cancer screenings. Today however, we have 90 percent of our participants receiving their annual physicals and 91 percent receiving their age appropriate cancer screenings!  Our invitation-only nurse outreach program, Personal Care Management, was also severely underutilized at only 6 percent participation. Today that participation rate is 91 percent. Clearly our members are better informed regarding their health status and taking steps, where appropriate, to make behavioral changes.

We are working closely with our actuaries on our 2016/2017 renewal rates, and even though it is still too early to completely feel the benefits of having these requirements in place, it appears we are on the right path to healthy participants and lowering claims. 

Employment law training

The risk management department received a great response to the Land Use Training Modules we developed in cooperation with the UNC School of Government. The modules are nearing completion, and are available free of charge to our members through our training partner, First Net Learning. 

We have entered into a cooperative agreement with a law firm that handles our defense of Employment Law claims to develop training modules similar to those we developed for the land use.

The topics that will begin next month include:

  • Do’s and don’ts  of applicant screening and hiring
  • Federal discrimination laws: Title VII
  • Federal discrimination law: ADA
  • Federal discrimination law: the ADEA, FMLA and GINA
  • The Equal Employment Opportunity Commission
  • The North Carolina Department of Labor
  • The Fair Labor Standards Act
  • North Carolina state law claims: Wrongful termination, violation of public policy, the Retaliatory Employment Discharge Act
  • Employment issues specific to local governments
  • The Intersection of Workers’ Compensation, employment benefits, REDA and FMLA

There may be other topic areas that develop along the way, but we believe these will become useful tools for your HR needs.

We plan to deliver one topic per month and hope to complete this project before the end of 2016.

Supplemental medical insurance

We all have seen significant change in the world of health benefits over the past 4 to 5 years. From the employers’ perspective, levers to control costs have been limited to things like plan design changes, which shift costs to employees, and wellness programs. We have seen a new product enter the marketplace -- supplemental medical “gap” insurance. These programs allow an employer to improve benefits for their employers while reducing cost. Your Health Benefits Trust (MIT) will be offering supplemental medical plans that can be paired with one of the MIT plans. Participants currently in our “richer” plans (Health Plus, Care Plus or Med 500) will see the most savings. However, savings will likely apply for those in other plans as well. Savings are achieved by moving your major medical coverage to a plan with greater deductible and coinsurance costs for the employee; then purchasing the supplemental plan to cover these additional out-of-pocket costs. The combined premium for the MIT plan and supplemental plan will be less than the richer plan offered by the Trust. These plans are not new in the marketplace, but they are improved in terms of administration and breadth of coverage.

You may wonder, “How can we save money on premiums and improve benefits?” With the right changes to your major medical plan, we can reduce the cost enough to layer in the supplemental health insurance and still allow significant savings. Once a claim is approved by Medcost (MIT’s claims administrator), but subject to a higher deductible or coinsurance amount, the bill is paid by the supplemental carrier.  Your employee has the same out-of-pocket costs, but will only be responsible for these costs on the back end (not up front) if they exceed the benefits available under the supplemental plan. This arrangement will also impact utilization as employees will seek not to exceed the limit of the supplemental plan in order to avoid having to pay the deductibles or coinsurance under the major medical plan. Improved utilization and less claims accruing to your major medical plan can mitigate future rate increases.

We will be offering webinars during the month of March to better explain this concept. We encourage you to listen in and learn more.

Renewal applications -- Please return ASAP

Each year, the underwriting department mails renewal applications to all Property and Liability Insurance Trust (IRFFNC) and Workers’ Compensation Trust (NCIRMA) members in March. The due date indicated on the cover letter is typically around May 9. We ask that you please return your renewal applications in a timely manner. Your prompt response helps in a number of ways:

  • Gives us enough time to process all the renewals by mid-June.
  •  Returns final renewal premiums to you as soon as possible for your budget purposes.
  • Keeps accurate records of insured items (autos, equipment, property) should you have a claim.
  • Updates your exposures for reinsurance reporting purposes and allow our reinsurance broker to provide us with timely invoices. Our reinsurers request that we report exposures by mid-June.
  • Allows us to pay your claims: all final renewal invoices must be submitted to the finance department before claims codes can be populated in claims system for the new program year. We cannot process any new claims if the information is not populated in the claims system.
  • To avoid any audit issues: Our financial auditors randomly review the applications for completeness each year. It becomes a possible issue if the renewal application is not returned.

To reduce administrative costs generated from multiple contacts requesting the renewal applications for the reasons listed above, we must impose a late fee if the Workers' Compensation or Property and Liability Renewal Application is returned after June 1. These late fees are flat fees based on premium size and would apply separately for each application.

30 day notice of non-renewal

As a member of the RMS insurance trusts, you are required by contract, to provide a 30-day cancelation notice in writing. If your entity will terminate your Property and Liability coverage with IRRFNC, your Workers' Compensation coverage with NCIRMA, or your Health Benefits coverage with MIT, you are required to notify our office in writing by May 30. Otherwise, your entity will be subject to a 2 percent exiting fee based on expiring year premium. This will also greatly assist us in determining which members we should invoice for 2016-2017. Participation in the pool is a one-year commitment per the interlocal agreement. Cancelations shall be permitted only at the end of a fiscal year or fund year (June 30).