Post on 04-Jan-2016
transcript
NMPSIA is born•Created by New Mexico legislators in 1985
•Response to unfavorable conditions in the insurance industry
•Many schools could not find risk insurance
•Medical insurance increases in the twenties
•School administrators lacked the expertise to bid and evaluate responses or manage programs
NMPSIA Structure•Mandatory participation by 88 of 89 school
districts and all charter schools
•Original proposed law was modified to exclude school districts with 60,000 or more students
•Colleges and universities not mandatory, but may opt to participate
•Other non-profit educational entities may also participate
Initial ResistanceObstacle Solution
• School administrators resisted because of loss of local autonomy
• Added an opt-out provision every four years
• Notification of opt-out provision given to school superintendents during the contract bid time period
• To opt-out, school district must prove same coverage obtained at equal or better price
Initial ResistanceObstacle Solution
• Union resistance due to lack of local autonomy and right to negotiate benefit package
• Local insurance agents loss of commission
• Gave unions seats on the Board
• Allowed schools to elect to pay commission to local agent
Board representation
2 classroom teachers from NEA1 classroom teacher from AFT-NM3 Governor appointees1 Superintendents’ Association1 School Business Officials1 Educational Entities at Large1 School Boards Association1 Public Education Commission
Key Components to Success•Build constituent support
•Mandatory participation to prevent adverse selection
•Balanced board representation
•Deficit payback provision for voluntary members who leave the pool
Self-insurance
• Initially, all programs were fully insured
•Over the years, both Risk and Benefits changed to self-insured
•The Risk coverages are protected with a self-insured retention limit of $750,000
•The Medical, Rx, and Dental coverages are totally self-insured without reinsurance
NMPSIA Today• Benefits and Risk
Programs covering▫ Mandatory: 88 Public
School Districts ▫ Mandatory: 67
Charter Schools▫ Optional: 24 Other
Educational Entities
•11 Staff Members
Risk Program Exposure•270,000 students (activities covered at no
cost to student)•41,000 employees•Property values in excess of $7 billion•5,000 buses and other school vehicles•Thousands of field trips•42,000 sports participants•6,500 volunteer workers
Risk Program Loss Control
•Civil rights training to discourage discriminatory employment practices
•Ergonomics Program to reduce repetitive motion injuries
•Premises safety inspections•OSHA trainings•Customized coverage documents
Past Medical Trend vs. NMPSIA
FY 05 FY 06 FY07
National Projected 13.1% 12.7% 11.7%NMPSIA Actual 11.0% 9.9% 7.5%
13.1% 12.7%
11.7%
11.0%
9.9%
7.5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
Recent Medical Trend
•FY 08 our medical trend exceeds national average
•15.5% NMPSIA versus 11% nationally•Catastrophic claims
10 between $330K & $550K 4 over $550K
•Overall increase in utilization and cost of service