Township Renews Insurance Contract With QualCare

The council approved a resolution to renew its agreement with QualCare for employee insurance with the added protection of reinsurance to cap loses at a certain dollar amount.

The renewal is from March 1, 2013, through Feb. 28, 2014.

According to township Administrator James Naples, the township entered into a three-year agreement in 2012 that fixed administrative costs with QualCare.

“It is a fixed cost, but the estimate is based on the membership,” he said. “The number will change if membership fluctuates. But the per member cost stays the same.”

Naples said the township’s plan is self-insured and pays for individual claims as they are incurred for employees and spouses.

Now, Naples said, they have added this layer of protection of reinsurance that caps the township’s loses at a certain dollar amount.

“In past years, we have increased the reinsurance limit,” he said. “We are recommending that again based on our history.”

In 2012, Naples said, the limit was $85,000, and any costs above that, the reinsurance would pay.

“We are asking to increase to $100,000 based on our history,” he said. “We think we will be successful in managing and keeping costs down and protecting the township’s interest.”

In addition, Naples said, they are lowering premium costs. If the reinsurance cap remained at $85,000, he said, the renewal price would be $446,000.

With the increase in the reinsurance cap, the costs are actually $385,000.

“We will save $41,000,” he said.

In addition, Naples said, chief financial officer Natasha Turchan has recommended that the township take that $41,000—which they have already budgeted for—and put it into a trust.

“If this year we have costs that exceed that $100,000, we can use the trust to cover the difference,” Naples said. “If we don’t, the trust will carry over to future years and will continue to grow.”

“It is giving us a further level of insurance,” he added.

Naples said the administration did look into the option of switching to state insurance, and, by staying with QualCare and self-insurance, the township is saving about $850,000.

With QualCare, as approved in the resolution, fixed reinsurance costs will not exceed $385,799, and administrative costs are estimated to be $171,513.

“The program as self-insured with a layer of insurance that continues to provide benefits for employers and taxpayers,” Naples said.