A FOUNDATIONAL APPROACH 

Written ByJeff Struckle

It was intriguing to watch the security measures put in place for the Presidential Inauguration. Military and security personnel were deployed throughout Washington, DC, to restrict access, while barriers and partitions protected attendees. While nothing can be 100% safe, the more measures put in place, the more things are protected. 

Though not on the same scale, protecting an Athletic Accident Insurance plan is similar. The more layers of protection applied to insulate claims, the greater likelihood expenses will be reduced. The In-house care provided by athletic trainers and the utilization of a student-athletes’ primary health insurance plan are important risk management components. They serve as the foundation for protecting and reducing medical expenses on Athletic Accident Insurance plans. However, even with these in place, there is still significant exposure. 

On average, 22% of student-athletes are uninsured or underinsured. Underinsured student-athletes may have insurance but their plans (government managed health insurance, out-of-network PPOs, high-deductible plans, etc.) either cover limited amounts or provide no benefits for intercollegiate sports accidents. While 22% may seem low, this group accounts for substantially more than 50% of total claims paid by an Athletic Accident Insurance plan. 

Mandatory Student Accident (MSA) plans, primary accident plans for uninsured/underinsured student-athletes, domestic and international student insurance programs that include benefits for intercollegiate sports coverage are just a few examples of ancillary products that can protect an Athletic Accident Insurance plan. 

A university partner recently faced increasing claims from a significant number of uninsured/underinsured student athletes. Annual premiums for the university nearly doubled over a three-year timespan. Administrators decided to mandate primary insurance coverage for all student-athletes. The university provided uninsured/underinsured student athletes with the option of carrying primary accident insurance or short-term medical plans in order for individuals to meet the requirement. Since implementing this requirement, average claims have been reduced by 75.6%. In addition, the current annual premium is 61% lower than the year prior to the mandate. 

Every college and university is unique. Not every institution has the ability to require all student-athletes to have primary insurance in order to participate intercollegiate sports. Any investment made to reduce the number of uninsured/underinsured student-athletes though will provide greater protection for students and insulate claims on the athletic accident program. It’s important for an institution to continually evaluate various ancillary products and programs to find ways to reduce the number of uninsured/underinsured student-athletes. Finding the right balance between an institution’s philosophical belief and implementing risk-management measures is the best way to protect an Athletic Accident Insurance plan. 

BENEFITS & SUGGESTIONS

Written ByJeff Struckle

Why do an RFP for Athletic Insurance Broker Services versus an RFP for Insurance products presented by brokers?

The most important decision a college or university can make for its athletic accident insurance program is the selection of an insurance consultant/broker to advocate for their institution. The insurance consultant/broker provides expertise and valuable services to support the Institution’s overall athletic accident insurance program that may not be considered through a product only RFP.

Examples of broker services include:

• Ability to evaluate the specific needs of the institution and strategically target companies that can provide these services.
• Experience evaluating the benefits that are provided by carriers and administrators, as well as the possible exclusions from the athletic accident insurance programs.
• Comprehension of the services and abilities provided by a claim’s administrator and understanding of how their compensation impacts overall medical expenses.
• Thorough understanding of the various nuances associated with such a unique insurance product.
• Provide risk-management consulting to help reduce overall medical and insurance related expenses.
• Serve as the primary contact to address issues or concerns with all companies involved with the program.
• Experience in leveraging a school’s healthcare strategies to negotiate with insurance carriers and claims administrators.
• Access to ancillary products (e.g. student accident plans) to complement an insurance program.
• Coordinate insurance premium payments, policy review, and distributing supporting materials.
• Serve as the hands-on advocate for the school.

College and University stakeholders are often unaware that most insurance carriers providing coverage for athletic accident insurance typically do not sell their products direct to an institution. The carriers rely on consultants/brokers to offer their products to the consumer.

When a college or university releases an RFP for an “insurance product” (instead of consultant/broker services), brokers scramble to try and reserve carrier markets, as carriers will typically not allow multiple brokers to offer their product to an institution. Most institutions overwhelmingly value price over other factors presented by the consultant/broker during the decision process, which means they may often select a company that simply was the quickest to a low-priced insurance carrier for a quote as opposed to selecting a consultant that presents better advocacy for the students and service for the institution. This highlights the importance of selecting the correct consultant versus an insurance product in the RFP process. Selecting the consultant/broker based on their services and expertise will ensure your institution has the best overall program to fit the needs of both the student and school.

Suggestions for the development of an RFP for Broker Services:

• Allow RFP responses to be sent electronically if possible. This allows for easy distribution to all committee members and allows brokerage firms to submit proposals quickly and efficiently. This will also encourage more companies to submit a proposal.
• Coordinate a meeting with finalists either in person or via a webinar. It has been our experience that a general presentation by the broker will provide further clarity for the evaluation committee, who are generally not experts in this type of insurance, on how these programs work. There are various nuances that lead to the potential increase of unrealized cost when selecting a product based solely on premium. It will also possibly lead to more questions by the committee and provide a chance for further clarification.
• Refrain from asking for product pricing during the broker RFP process. The selection of an insurance broker to represent your institution should not be decided solely on the price of the product they can bring you, but the overall advocacy services and access to the marketplace they can provide.
• It is best to offer multi-year agreements with the selected broker. Some brokerage firms may decline to present a proposal if they feel like the broker process will occur annually.
• Provide an outline of the evaluation process in the RFP. Brokers are interested in the specifics of what a school is looking for and how the final decision will be made.
• Provide a general summary of your current athletic accident insurance program. This does not need to be overly detailed, but it is helpful to know if your program is a fully insured program, or aggregate. What the deductible level is. What sports are currently covered, etc. There is no obligation to include loss or premium information during the RFP process.

Suggested Question to ask Consultant/Broker Candidates:

• Provide a brief history and summary of your expertise in working with athletic accident insurance? (This type of insurance is unique, and you will want to work with a company that has at least 10-years of experience)
• What is your approach to attaining quotes from insurance carriers?
• Who are the insurance carriers that the you will access?
• Who are the claims administrators that you will access?
• If selected, what specific information will you provide our institution to assist in determining which claims administrator and insurance carrier we should consider?
• Provide some examples of how your company would advocate on behalf of the institution?
• Provide some specific examples of past strategies that you have utilized to help a client reduce expenses.
• Describe your plan to provide consultation with our insurance program and the frequency in which this will occur.
• What differentiates your company from other companies?