Student Athletic Insurance for Texas School Districts

To the best of our knowledge, 100% of Texas school districts self-fund their group medical plans (TRS ActiveCare is a self-funded plan), yet 100% of Texas schools fully-insure their athletic insurance. We are wondering why. If districts save money through self-funding their medical plans, why cant they save money on student accident plans as well?

Basic student athletic insurance offers limited benefits. In addition to this basic cover, many districts purchase catastrophic cover starting at $25,000. It seems to us that it makes perfect economic sense to self-insure the limited benefits portion of the program and purchase stop-loss cover with a $25,000 retention. We have identified several carriers that will offer specific stop loss for student accident plans.

Districts can partner with area medical providers for the best cover at the lowest cost. After all, medical providers in the community are school district taxpayers too.  They would support such a partnership.

One possibility to consider would be to fund an athletic insurance program through a captive with more than one school district participating through an interlocal agreement. Participating districts would then be able to participate in underwriting profits and maintain control of plan benefits and costs. An interlocal agreement would preclude districts from bidding out their student accident insurance every year.

$20,000 Bonus Offered By Major Health Carrier

An agent solicitation from a major health insurance carrier, sent out this week to agents throughout the United States, announces a $20,000 cash bonus to those agents who sell 20 group health insurance cases between April 1, 2009 and December 31, 2009. And, if the agent sells only 10 groups, the bonus is $10,000.

This is a powerful incentive to place business with this carrier, over another carrier wherein little or no bonus is offered. A broker, supposedly representing the client with whom he works for, may not disclose this arrangement. A conflict of interest would be apparent it would seem.

Acorn will surely get wind of this and organize a bus tour  to homes of participating agents and brokers.

Carrier Provides PPO Specific Rates

An A (Excellent) rated carrier insures a small group health product in Texas that is administered by an out-of-state TPA. Employers are given an option of six (6) PPO networks to choose from. There is a premium factor assigned to each network, persumably based on the “discounts” in place.
 
One would assume that the carrier has access to each PPO’s contracted rates with providers and therefore can document which network has the deepest “discounts” and which do not. However, we dont know that for sure. But if it is true, then one could conclude that some PPO networks have negotiated better deals on behalf of their clients than others. This adds credance to those sales pitches we hear from agents, brokers, carrier reps. and consultants.
 
The problem with all of this is that we have no documentation to support this conclusion. However, what we do have is the PPO rate factors published by this carrier for their Texas small group block of business:
 
                                             Discount off Manual Health Rates
HealthSmart                                           -10%
IMS                                                          -7%
Texas True Choice                                  -10%
Beech Street                                           +2% Premium Load
Interplan                                                -4%
PHCS                                                      -5%
This TPA is charging a $6 pepm PPO access fee, irregardless of which network is selected.