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SIS - Healthcare Industry Self Insurance Program Rebuilds Membership.

ONTARIO, Calif. -- 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 Responsibilities (http://www.dir.ca.gov/sip/sip.html)," that reminds members, including former members, 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, please contact Ned Barnett - 702-561-1167 or ned@barnettmarcom.com
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Publication:Business Wire
Geographic Code:1U9CA
Date:Apr 26, 2012
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