The accounting system used by the cancelled Morneau Sobeco/National Student Health Network insurance plan, the plan the 2008-2009 council mandated its executive to sign, was too risky, new CSU officials are saying.
The cancelled plan would have involved a switch to “retention accounting.” Under this system, if covered students claimed less than they paid in premiums, the CSU would be refunded the difference. But if students claimed more than was paid in, the CSU would be liable.
“We felt that the risk was to high, it was especially too high these days because the trend was that claims were going up. They have gone up over 25 per cent from two years ago,” said vp finance Samuel Moyal.
Instead, the CSU required brokers bidding for the plan to provide a “fully insured” model, where students would pay a fixed amount, regardless of the amount of claims.
Last winter representatives from Morneau Sobeco and then-CSU executives, Keyana Kashfi and Andre Leroy said that the switch to retention accounting could save students thousands of dollars each year.
Since 2005 Concordia students have claimed less than they paid into the system in premiums.
In anticipation of the switch to retention accounting the CSU set aside a reserve fund of $800,000, raised through a $40 surcharge on the health plan.
Moyal and vp services, Prince Ralph Osei said the money might be used to bring down the cost of the health plan this year.
“We want to see what options we have to exhaust that reserve,” said Moyal. “Potentially, maybe subsidizing the health plan more.”
Six companies were invited to bid for the right to broker the plan. While a request was sent to Morneau Sobeco, the company does not offer fully insured plans and did not respond, according to Michelle Dumais, director of finance and administration for the CSU.
Four bids were received, two of which were accepted. A bid from Groupe Major was rejected as incomplete, because it did not include administration, meaning the CSU would have had to run the plan itself. While a bid from Gallivan and Associates was rejected because it was received after the deadline, according to Dumais, this bid was also incomplete.
Accepted bids came from Montreal-based ASEQ, the largest student health plan broker in Canada, and from Toronto-based ACL Student Benefits – which represents a handful of, mostly, small schools in Ontario and New Brunswick.
Dumais and Moyal judged the bids along with CSU president Amine Dabchy and councillors Leah Del Vecchio and Kaysy Paolucci, with the ASEQ bid receiving unanimous support.
The per-student cost of the ASEQ plan was lower, at $156.59 than the ACL bid of $175.19. The ASEQ bid is an increase of around $5 over the current plan.
But according to Dumais, despite the price difference, “the services appear comparable.” Adding, “they certainly don’t seem to be offering more.”