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 Trust Matters - May 2013 

Health care reform update

What is the meaning of Trust Matters?

Risk Matters: RMS finds root of accidents, provides seminar to help

Online training participation soars

Did you know?

Property/Liability and Workers' Compensation coverage renewals reminder

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Health care reform update

Employee and employer mandates take effect and the insurance exchanges will open in 2014. The law requires employer plans to meet several requirements. However, many employers have reduced plan benefits over the past several years in order to balance budgets. The question becomes, “is my plan meeting the plan design requirements of the Affordable Care Act?” If not, and you have 50 or more full-time employees, those that work 30 or more hours per week, and one of them purchases coverage through the exchange and receives a subsidy, then you will be subject to penalties for failure to comply with the employer mandate. Here are the high-level plan design requirements, but this is not an exhaustive list:

  • Dependent coverage to age 26 – All health plans, including grandfathered plans, must permit enrollment of dependent children to age 26, regardless of whether other employer sponsored coverage is available or not.
  • Elimination of pre-existing conditions – Pre-existing condition limitations must be eliminated for plan participants of all ages.
  • Out-of pocket maximums – Annual out-of-pocket maximums for deductibles,  co-pays and coinsurance may not exceed the amount applicable to coverage related to Health Savings Accounts; for 2014, these amounts are $6,350 per individual and $12,700  for family (this applies to non-grandfathered plans only).
  • Annual deductible maximums – This provision does not apply to self-funded health plans; it applies only to non-grandfathered plans in the small and individual markets. For the impacted health plans, annual deductibles may not exceed $2,000 per individual and $4,000 for families.
  • Waiting period limitations – The waiting period for eligibility under an employer-sponsored health plan may not exceed 90 days.
  • Clinical trial-related costs – Health plans are required to cover routine costs associated with participation in clinical trials for qualified individuals.
  • Transitional reinsurance program – For three years beginning in 2014, health plans will be required to pay an assessment to offset risk in the small group and individual markets from the guaranteed issue requirement and elimination of pre-existing condition limitations. The assessment will be $63 per covered life in 2014 with first payment due in January 2015 and payable by insurers and third-party administrators
  • Employers reporting to IRS – Employers that provide minimum essential coverage must provide information to the IRS about the employees covered under the health plan to monitor compliance with the individual mandate. Employers also must provide information to the IRS about the type of health coverage offered to employees to monitor compliance with the employer mandate.

Additionally, on May 8, Federal regulators released model notices that employers can provide to employees to satisfy a federal health care reform law requirement that employees be notified about the availability of public health insurance exchanges. Employers must distribute notices prior to October 1, 2013. You can access the link via the following link: www.dol.gov/ebsa.

What is the meaning of “Trust Matters”

The three insurance trusts are member owned programs managed by your League for the benefit of you, the membership. Therefore, it is incumbent upon the League's staff to earn and keep your trust as we manage the Trusts under the direction of the Risk Management Services Board of Trustees.

We asked trustee Roger Stancil what “Trust Matters” means to him and here is what he said: “As a customer of Risk Management Services, I always believed the towns’ interests were well served because, in effect, the towns owned the RMS. When I was given the opportunity to serve on the Board of Trustees, I learned this trust was well founded as I have observed the development of information and the professional staff recommendations based on that information. Our customers are not just customers, they are us.”

Risk Matters: RMS finds cause of police accidents, provides seminar to help

It isn’t a surprise that police officers are most often injured when arresting suspects. However, the second-most dangerous task police officers face is a common one – operating a motor vehicle.

The League’s Field Services department did an extensive analysis of all insurance claims from the past five years to find solutions to preventable injuries.

“If you want to reduce losses and prevent injuries, you have to know what’s driving those events,” said Director of Field Service Bryan Leaird. “The only way you’re going to know what’s truly driving those events is to look at your history and see what actions are happening, where they’re happening and what’s causing them.”

Leaird said the findings were helpful to accurately show what is going on in North Carolina’s insurance pool instead of using data from other states. Through looking at Workers Compensation claims, police reports, injuries and accidents, the Field Services team was able to calculate that the average cost to repair a police vehicle was more than $3,000, while the cost of an injured officer averaged almost $17,000.

“A vehicle accident means not only damage to our patrol cars, the injury to other people we hit and damage to their vehicles, but the injuries to our own employees, as well” Leaird said.

Most surprisingly, the research showed that most accidents aren’t related to high-speed chases or emergency response, but occur when officers perform low-speed, routine driving activities like hitting fixed objects and pulling out in front of other vehicles.   

According to Leaird, that information tells him officers need more training on how to better handle distractions associated with the job, so his team organized a police driver training seminar to bridge the gap between a trainer’s expectations for officers and reality.

“One of the perceptions in law enforcement driver training is that pursuit and emergency driver training will meet all the needs. That really isn’t the case,” Leaird said. “When there’s an accident involving pursuit or emergency response, it can be catastrophic, but what we’re trying to help our members realize is, in addition to the pursuit and emergency response training, that they need to do focused training that addresses the activities that are truly causing the accidents.”

The seminar spanned two days in April at the Charlotte Vehicle Operations Center. The League invited 18 groups of driving instructors and command staff members to learn techniques they can take back to training sessions at their departments.

Leaird, Hillsborough Chief of Police Duane Hampton and Hillsborough Town Manager Eric Peterson led classes and on-course driving drills in Charlotte. Peterson also helped develop the League’s Slower is Faster police driver training video last year. Since early 2012, multiple organizations, including the N.C. Justice Academy and Georgia Municipal Association, have used the video to facilitate driver training seminars.

For Asheboro Police Captain Todd Swaney, the seminar brought generational differences to light that he didn’t take into account before. Swaney, who’s worked in law enforcement for 26 years, said he will make the training standards more specific to ensure rookie drivers are prepared for the job.

“At age 21 or 22, it’s a possibility that they’ve only been driving for two years or so if they come from a different background than I did,” Swaney said. “If we look at the statistics, a lot of the accidents across the state are occurring in the first two years of an officer’s experience.”

Swaney and Leaird recognize the number of distractions officers have behind the wheel. Operating a vehicle’s lights, siren, two-way radio and computer while driving is challenging, especially when transporting a potentially dangerous suspect.

“The average driver only looks about 3 to 6 seconds ahead of their vehicle,” Leaird said. “What we’re trying to help them realize is you have to look into the future so you’re able to make the decisions you need to make before you come up on the car that’s getting ready to pull out into the intersection or make some other adverse action.”

Swaney, who’s responsible for 84 officers, said he plans to incorporate one of the strategies he learned at the seminar to combat the number of distracted-driving accidents. At Asheboro’s annual in-service training this fall, he’ll have officers verbalize what they see ahead, causing them to constantly scan the road for potential obstructions or accidents.

According to Leaird, that’s exactly what the training was supposed to accomplish.

“It’s not just about reducing claims,” Leaird said. “It’s about keeping our officers safe.”

For more information about driver training methods and access to the Slower is Faster training video, contact Bryan Leaird at 919-715-2905.

Online training participation soars

We are experiencing an increase in the use of the online safety videos. For the first three months of this year 1,692 online training classes were completed by employees from 54 members. We continue to work with the vendor to provide updated videos and increased topics. We recently received a call from a member to say thank you so much for expanding the course offerings and what a wonderful service it is for their municipality. If you are not taking advantage of this free service, then contact Brenda Rich on the League's RMS staff.

Did you know...

...your Workers’ Compensation program processes and pays more than 17,500 medical bills a year?  Steven Lee, League director of claims, says a new software program may save your workers’ compensation fund as much as $8 million a year.

All medical bills go through a process of bill review.  The League contracts with a bill review vendor to provide this service.  In March of this year, we entered into an exclusive arrangement with AON/Mitchell Smart Advisor, a software program that promises substantial savings for your workers’ compensation claims.  With this software, once a medical bill is received and scanned into our claims system, it never leaves the system -- the software reviews the medical bill and issues payment for the claim adjuster or claim manager to approve for release to the medical provider.

With our previous bill review provider, we were saving an average 34 percent of the cost billed by the employee’s medical provider. With the new AON/Mitchell Bill Review software, we believe the savings will create an additional 12 to 15 percent, or as much as 49 percent of the amount billed by the employer’s medical provider.

As an example, your workers’ compensation program processed 17,509 medical bills last year, and medical providers billed charges totaling more than $13 million. We were able to reduce these charges through application of the state fee schedule and a preferred provider organization network to just more than $7 million, a savings of 39 percent.  This year, however, our savings on 15,000 bills was 34 percent of the $11 million billed by medical providers.

With the new AON/Mitchell Smart Advisor software, we should realize an additional savings of more than $1 million.  In the two months the software has been in place, 3,454 bills have been reviewed saving $1.3 million or 45.9 percent of the charges billed. This software allows the bill to be reviewed by up to 10 preferred provider organization networks that the medical facilities contract with.

Medical costs continue to rise and directly affect your health and workers’ compensation insurance, so these savings are certainly worth the effort.

Property/Liability and Workers’ Compensation coverage renewals reminder

We greatly appreciate all of our members that participate in the Property/Liability and Workers Compensation Insurance pools. We have passed our May 9 and May 15 renewal application deadlines, and we need these back promptly for several reasons:

  1. The sooner we receive the completed renewal applications back, the sooner we can provide you with your final premium numbers for your 2013-2014 budgets.
  2. Our property, liability, workers comp, and bond reinsurers need payroll and exposure numbers to provide us with reinsurance premium numbers for the pool budgets.  In order for us to finalize our reinsurance coverage, we need to submit the data for all our members to the reinsurers.  One member submitting late data can affect finalizing reinsurance coverage for all pool members.
  3. There is a question pertaining to quotes and invoicing for the 2013-2014 fiscal year. The answer to this question allows us to plan for invoicing and billing for the month of June.  If you are going out for quotes, we will not invoice you until we know for sure you are renewing.

If you have not returned your renewal applications yet, please do so as soon as you can. Feel free to contact the underwriting department if you have any questions about completing your renewal apps at RMSunderwriting@nclm.org.