QPAT Health Insurance 101
How does group insurance work?
We all put money into a pot. Whenever someone from the group needs to cover an approved expense they take money from the pot. The fact that we are a large group of people paying into the same pot means we can each contribute a moderate amount, but have access to large amounts of money if something goes wrong.
In order for this system to work there are rules about how much must be kept in the “pot” in order to adequately cover the expected claims. These amounts are calculated based on a series of factors. Some of the factors include: historic claim levels, current long term commitments to claimants, the level of risk in the population insured and others. Some factors that raise our contributions are the small number of teachers in QPAT and the fact that our employers make no contributions. Every penny paid out by IA is a penny paid in by a teacher.
The fact that there are no contributions to the health plan from the government is why our insurance is more expensive than many others. Most Industries subsidize health premiums as one of the non-monetary benefits of a position. The insurance benefit we receive from the school board is 2 year salary insurance in case of illness. Teachers do not pay premiums for this, it is separate from our QPAT health insurance.
Why does a separate company manage the insurance funds?
Insurance is an industry unto itself. It has a large number of regulations and legal obligations. In addition, even a small group like QPAT generates hundreds of claims every week, and dozens of complicated unique situations a month. QPAT has an executive who’s dossier is to facilitate between teachers and IA in the complicated cases. QPAT retains its focus on teachers by hiring specialists to deal with the legalities and fiscal obligations.
Does the company ever change?
QPAT goes to market roughly every 4 to 6 years to reassess the company that manages the insurance fund. The companies describe their services and capabilities and fee rate. QPAT then considers the bids and decides whether to continue with the current servicer or switch to a new one. Not all insurance companies are interested. There can be interesting roadblocks, for instance the insurance servicer must work with the GRICS pay system, and many do not want to.
Where does any extra money go?
Nowhere, it stays in the fund, or back to teachers as a premium holiday.
How does the insurance servicer make their money?
The insurance servicer makes the same money regardless of the claims accepted or denied. The money in the fund is never theirs. They earn a set fee, normally a percentage based on the size of the fund. Larger funds will have more participants and therefore more claims to process hence the percentage model. Denying claims does not earn them extra money.
Who decides what is covered under QPAT insurance?
QPAT. The process is initially discussed at the membership plans committee, who makes a recommendation to the executive committee, who makes a recommendation to the board of directors. The board of directors can make a final decision, but can also redirect it to the AGM meeting if a consensus cannot be reached, or the issue is deemed a major change. The point of the different committees is to try and weed out any really bad ideas and ideally also to prevent groupthink. Each of the committees have a different composition from union staff to local union executives that sit on them.
There is no limit on what the plan can theoretically cover, but all additional coverage comes with an associated premium amount. For instance, dental coverage causes a large premium increase. There is a legal obligation to have money in the fund to cover the claims.
Why do our premiums go up most years?
The insurance servicer reviews the claims that were made in the previous year and uses that to estimate the likely financial needs of the fund in the following year. By law, they are required to estimate high. Also, certain types of claims carry higher fiscal responsibilities. For instance, long term disability claims require that the fund have enough money set aside to cover the claimant until their 65th birthday. If the claimant returns to work, then that obligation ends. The fiscal responsibilities increase and decrease based on the health of our teaching population. Over the last few years there has been an increase in the claims that carry heavy long-term fiscal responsibilities for the fund.The premium increases occur in January.
Who is responsible for insurance paperwork?
The teacher for claims and the school board for changes in enrollment. It’s the school board's job to provide you with the forms and forward them to IA for any changes to usage of the insurance plan. The easiest way for teachers to submit claims is through IA’s client space, if you have registered for it. You can upload photos of receipts and register for direct deposit.
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