|[April 26, 2012]
SIS - Healthcare Industry Self Insurance Program Rebuilds Membership
ONTARIO, Calif. --(Business Wire)--
The Healthcare Industry Self Insurance Program of California ("HISIP"),
now under management by Self Insured Solutions of Ontario, California,
is moving forward with a plan designed to secure the long-term solvency
of this self-insured group (SIG). As part of this dynamic plan, the SIG
is contacting its former members with an offer - including a significant
financial incentive - to encourage them to rejoin the group.
"HISIP's membership has been reduced over the past couple of years, and
we feel that the primary cause of this reduction was bad publicity in
2009 and 2010 which caused some members to leave the group," according
to David Johnson, a partner with Self Insured Solutions, "so we are
taking a number of bold, necessary steps to rebuild membership - and one
of those steps involves enticing former members to come back."
Rebuilding HISIP's membership is one key to ensuring the SIG's long-term
solvency, Johnson explained. "Funding the group's long-term liabilities
with a reduced number of members has been a challenge," he said. "We are
offering former members a chance to rejoin the program and help the SIG
meet its obligations."
HISIP is contacting its current and former members concerning options
they have for participating in the process of helping the group to meet
its responsibilities. The California State Office of Self Insurance
Plans recently released a notice, "Self-Insurance Group Affiliate Member
that reminds members, including former mebers, of their
responsibilities for shortfalls incurred by the group.
"We don't believe that it's fair that a company would join a group,
enjoy big savings when times are good, and then abandon the group and
expect others to pick up the bill for the liabilities created by the
group," Johnson said, "and we want to correct that by reaching out to
former members to tell them that they should consider rejoining."
Johnson acknowledged that HISIP has an actuarial deficit, and said that
the HISIP Board instituted a series of prudent but sweeping changes to
cut costs and operate more efficiently. The Board:
Hired a New Group Administrator, Self Insured Solutions
Increased Contribution Rates for 2012, approximately 11.7%
Completed Separation of Service Providers
Installed New Loss Control Procedures
Hired a New Third Party Administrator (TPA), Intercare Holdings
Added New Board Member, Randy Taylor of HealthSmart Pacific, Inc.
"We are giving former members a choice," Johnson pointed out. "They can
rejoin the group and pay their share of the actuarially-based
liabilities on an installment basis over several years, or they can
purchase insurance elsewhere and cut our group a check right now. We
think they'll do the right thing and help their group."
Part of the reason the group has a shortfall is that self insured groups
have a higher standard of solvency than traditional insurance carriers,
according to Johnson.
"Unlike a standard insurance company, which is only required to fund its
liabilities at an 'expected level,'" Johnson said, "a California self
insured group is required by state regulations to fund its liabilities
at a considerably higher level. We feel that by attracting those former
members which are sound risks to rejoin the group, HISIP can meet its
higher standard of liabilities and ensure compliance."
Johnson pointed out that California law is the most conservative in the
country, and requires SIGs to maintain a deposit with the state's Office
of Self Insurance Plans equal to 135% of its estimated future liability.
These higher standards can be a source of added strength to the self
insured group industry; however, they also require that a given group's
members must cooperate in ensuring that these standards are met.
About Healthcare Industry Self Insurance Program of California
Healthcare Industry Self Insurance Program of California (HISIP) is a
group self insurance worker's compensation program for healthcare
facilities in the State of California, which was designed to control the
high costs of workers' compensation without sacrificing quality loss
prevention and claims services.
About Self Insured Solutions
With offices in Ontario California, Self Insured Solutions (www.selfinsuredsolutions.com)
is one of California's most successful developers and administrators of
private self-insured workers' compensation groups (SIGs).
For more information about California-based Self Insured Solutions - or
to interview Dave Johnson (News - Alert), please contact Ned Barnett - 702-561-1167 or email@example.com
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