By: Harvey Mathias, Director of Risk Management
After 30 years of operation, SCLGAG, the self-funded health benefits program sponsored by the Municipal Association of South Carolina, will be dissolved effective June 30, 2011. The program will continue to operate through June 30, 2012, for the sole purpose of paying any claims that occurred before July 1, 2011, but not paid before dissolution.
The decision to terminate SCLGAG was a very difficult one, but it was the right decision based on factors beyond the control of the board of trustees and staff. It is important to note the decision was not because the program was experiencing financial difficulty. Rather, it was due to declining participation, external economic issues and the unknowns surrounding the new federal healthcare law.
Staff and the board spent much time evaluating options to allow the program to continue. Finding no reasonable options and after much discussion, the board unanimously recommended dissolution to the membership. The membership overwhelmingly approved the recommendation by a vote of 51-6.
The RMS staff has been working diligently with MedCost Benefit Services, SCLGAG’s third party administrator, to provide assistance and information to the members as they evaluate their coverage options. The Municipal Association is committed to doing everything reasonably possible to help SCLGAG members during the transition.
On a more positive note, the SCMIT workers’ compensation and SCMIRF property/liability programs are doing very well. The 2011 contributions (premiums) decreased by a combined total of $5 million ($3 million for SCMIT and $2 million for SCMIRF) for members in the program for at least three consecutive years and who renewed their coverage. This was a tremendous member benefit, particularly given the current economic climate.
In addition, SCMIT and SCMIRF continue to offer grant programs to help members purchase needed safety equipment or other items that help to reduce claims. In total, these two programs will provide $250,000 in grant funding in 2011.
Both SCMIT and SCMIRF saw reductions in their reinsurance cost because of the programs’ favorable claims experience. The programs passed these savings along to the members in the form of rate reductions and other benefits.
Other benefits provided include safety and loss control consulting services, training, and a labor “hotline” for free legal advice. All of these services promote a safe work environment and result in a reduction in claims. After all, the way SCMIT and SCMIRF can remain financially sound is to control, or minimize, the cost of claims. Thanks go to the members for their efforts in managing costs.
In these challenging times, there are many opportunities for us to work together for the good of all. The RMS staff is here to assist you in this effort.