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Health Plan Change Official

by Archives March 17, 2009

The change of providers for the student health plan is official. CSU council voted to hire Morneau Sobeco/National Student Health Alliance to act as insurance brokers at a council meeting Thursday.
While the change has been in the works since December, it only became public in February when Lev Bukhman, the owner of the CSU’s previous health plan broker sent a public letter to CSU president Keyana Kashfi, university administration and campus media. The letter alleged the CSU had acted in bad faith.
The CSU claims Bukhman’s company, ASEQ, mismanaged the plan and cost students hundreds of thousands of dollars.
Details of ASEQ’s alleged mismanagement were presented to council behind closed doors on Thursday in a report by Joel Duff, an official with the Canadian Federation of Students (CFS), who was hired by the CSU to study the current plan.
The National Student Health Alliance is a subsidiary of the CFS. However Duff, who was paid $1 by the CSU, said this didn’t present a conflict of interest for him.
“I’m not here representing the Canadian Federation of Students or the National Student Health Network,” he said. “I’m here as a consultant for the Concordia Student Union.”
“He didn’t make any recommendations for where to go, or outline any future plan for the CSU, he merely outlined the historical context,” said council chair Brent Farrington, who is also an employee of the CFS. In December the CSU asked Morneau Sobeco to conduct a market tender, a process where insurance companies are invited to make bids to provide the plan.
The results of this process was also presented to council on Thursday by Keith Morrallee, a partner at Morneau Sobeco and Gerry Matlashewski, a principal at Morneau Sobeco.
Morneau Sobeco received bids from five insurance companies, however they did not receive a quote from the current insurance company, Sun Life Financial. The 15,000 Concordia students who are part of the health and dental plan currently pay $195 per year.
According to Morrallee and Matlashewski after surcharges paid to the CSU and ASEQ, $127.80 is paid to Sun Life in premiums, as well a fee of 14.05 per cent is paid to the company on every claim.
They recommended the CSU switch the plan to Green Shield, who will match the current plan at a cost of $117.74 in premiums, with an 8.2 per cent fee.
Student Unions at 27 universities currently have their health plans provided by Morneau Sobeco/National Student Health Network, with Green Shield. None of them are in Quebec.
According to Tom Rowles, coordinator of the National Student Health Network, only two schools who deal with the network have plans that aren’t though Green Shield.
Both the National Student Health Network and Green Shield are non-profit companies, while ASEQ and Morneau Sobeco are for-profit corporations.
Morralle describe Morneau Sobeco as “the largest Canadian owned benefits consulting firm.”
However the National Student Health Network has run a surplus – at least in the past, this surplus has been transferred to the CFS. In 2004 the CFS made $89,034 from the Network, while in 2005 they made $32,068.
Morrallee and Matlashewski also suggested the CSU switch to a “refund” or retention accounting model. Under this system, if the amount of the insurance claims made by Concordia students is less then the premiums they paid into the plan, this “surplus” will go back to the CSU; however the union will be responsible if students claim more than the premiums cover. The current plan operatives under a “fully insured” model, which means the CSU pays a set amount each year, no matter how much is claimed for the past three years this amount has been less than what students have paid in premiums, meaning that if claims stay at their current rate, the CSU will receive this surplus under the new plan.
The motion to hire Morneau Sobeco, introduced by councillor Catherine Decaire, first resulted in a tie after several councillors questioned the speed of the process, with the vote coming immediately after the Morneau Sobeco presentation, and the fact that only one broker had been asked to solicit quotes.
“I don’t think it’s the best way to move forward, to just sign this off right now,” said councillor Shandell Jack. He said that while he was not opposed to signing with Morneau Sobeco, ASEQ should have been given a chance to make a counter offer.
However almost immediately after the vote, councillor Brian Solloway who had abstained, said he had been confused and called for a re-vote. Because Solloway had not been on the losing side of the vote, Farrington allowed the re-vote.
Both Solloway and councillor Eddie Fuchs, who had also abstained, changed their votes, allowing the motion to pass.

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