Insurance Trust Meeting March 10, 2017

Transcription

1 Insurance Trust Meeting March 10, 2017 MG James Hoyer MG Deborah Ashenhurst (absent) MG Max Haston (another meeting) Maj Gen Don Dunbar Brig Gen (Ret) Ken Ross BG Joanne Sheridan Lt Col (Ret) Pete Renaghan Col Craig Lloyd Frank Yoakum CMSgt John Harris (absent) COL (Ret) Don Deering Colleen Chipper (another meeting) MG Curtis, AGAUS (absent) CAPT Mark Timmons (deployed) Gen Hoyer called the meeting to order and welcomed the new member Craig Lloyd from North Carolina to the Insurance Trust and thanked him for his willingness to serve. Gen Sheridan called the roll and reported a quorum is present. Gen Hoyer entertained a motion to approve the minutes from the November meeting. Gen Dunbar so moved. Col Deering seconded. Motion carried. Insurance Update: Dave Monson, Account Manager With him is Walt Szafranski, head of Affinity Markets Recap of 2015 o Started slow but finished strong; surplus and excess PSR a little over $700,000 for the year o Total revenue to NGAUS was $1.37M o Compared to other years, not the highest, not the lowest, a good strong performance Recap of 2016 o Tracking in July ahead of 2015; estimated total revenue to NGAUS for first six months was a little over $600,000 through June 2016 o At 10 months were looking at an estimated surplus of a little over $600,000, quite a bit better that 2015 o Total revenue through 10 months was estimated at about $1.1M to NGAUS o month report total technician plan fee a little over $500,000 o Year-end surplus for 2016 was over $1M and the check was sent to Luke Member Life Plan o No member life surplus o Plan did better this year o Came out positive this year, but was in a deficit the prior year; there was no excess PSR to distribute 1

2 New York Technician Plan o Fees for the year was a little under $12,000 o Total revenue to NGAUS for 2016 came in a little over $1.6M for the year; solid performance for the year Disability Claims o Lower claims last year o Lower surpluses in prior years attributed to higher disability claims o End of last year there were 68 open claims o Continued to decline; end of 2016 at 55 open claims Mr. Szafranski commented that hopefully this is a progression to the norm and the surpluses will increase. He expects some stability with this program. Premiums are declining. He commented the program is very solid. Gen Hoyer asked about the root cause of the spike in claims. Was it deployment related? Mr. Monson said the spike in claims were due to wear and tear, bad backs, bad knees, hip replacement and a lot of things that weren t directly attributable to an incident that happened while they were on active duty, but from carrying heavy body armor while on multiple deployments. Gen Hoyer said that peak was when technicians had been in the system for a while, they would have been on multiple deployments. Gen Ross said the hope that the claims would taper off and it seems as they have done so. Gen Hargett asked if it is possible to do a historical trend of the age of the technicians from 2010 until after the war. Mr. Monson said that is possible. Gen Hargett said we may find the age of the technicians is younger than 10 years ago. Mr. Monson said there are alpha listings of all the insureds. Gen Hoyer asked about impacts on members who would potentially be converted to Title 5. Gen Hargett said if they are a guard member technician they are eligible. He said a Title 5 person may not be a guard member and not eligible. Mr. Monson said currently that is how the program is set. Gen Hoyer said that may very well impact us. Gen Hargett said it could. Col Deering asked if they could grandfather the technicians over to Title 5. Gen Hargett said he does not know. 2

3 Mr. Monson said they will have to take a look at this, because right now anybody who is a technician who is working for the National Guard is eligible for the plan. Gen Hoyer asked if that includes both dual and non-dual status technicians. Mr. Monson said the eligibility provision has some language where if they are working and assigned by a competent authority to work for state National Guard they can fit them in. He said they have had non-dual status folks over the years and if they are working full time actively employed working for the National Guard, usually they can be covered. They need to take a look at their language to make sure. He said he has been following the data that 20% of the technicians will become Title 5 beginning in October. Gen Hargett said that number may not be 20% but there will be some. He said he did not think that non-dual status technicians were eligible. Gen Hoyer said it does not mean a dual status technician will get that and when a dual status retires and the conversion occurs it doesn t mean a guardsman will get it because it will go out to a Title 5 registry. Gen Hoyer said he does not think we have been marketing to the non-dual status technicians. Gen Robinson said he thought there was an assumed level of fitness because they were a member of the National Guard and that was part of the reason rates were reasonable; he asked if that is the case. Mr. Monson said they will have to look at more of an employer group where they are looking at their duties and what they are doing and look at it that way. He said the plan already functions as an employer plan, but they have always had in the background where they know they are deployable and there is a healthier population. Gen Hoyer said under the new construct, there is a possibility to get some unhealthy people who have not worked in certain positions. Gen Hoyer asked that we create a tasker to ask Dave to look at this and the implications to the Trust. Gen Robinson said as a part of the tasker we need to make sure that the payroll deduction authority is not tied to any type of military membership. Also, need to make sure there is no specific guidance that says something specific about the dual status that refers to membership. Gen Hoyer said we also need to look at the authority for the Title 5 will reside at the Guard Bureau, with a delegation of authority to TAGs for management of those individuals. He said the Guard Bureau could say that they will not allow the Trust to market to Title 5 s who work for the Title 10 authority. Gen Hargett said he hopes that does not happen. 3

4 COL Deering asked if Title 5 s are not members of the Guard, will they lose their payroll deduction. Gen Robinson wondered if there is still some tie to their military membership even with regards to the technician pay. Gen Hoyer asked Luke to take a look at that with Mr. Monson. Mr. Monson said we may be okay on the payroll deduction because the technicians are currently paid through the DPCS system and most federal employees are paid under that same system. There is another block of business where they do payroll deduction through the DCEP system for federal employees. Gen Dunbar said the technician is defined in one part of law and the Title 5 civilians are defined in another part of law. He said we have to change something in order to market to Title 5 civilians. He said right now it says in our by-laws they have to be an army or air federal technician and Title 5 federal employees will not be technicians. Gen Hargett said it may just be our bylaws and perhaps we should change our by-laws to make them eligible. Gen Dunbar said a non-dual status is still a technician until 30 September when they go away. Both dual and non-dual are technicians under the National Guard military technician program. One has a military requirement and one doesn t; he does not know if we market to them but that is what the law currently says. He said there are Title 5 civilians in DOD now and there may be a program where they get this kind of coverage already that may compete with us, so getting ahead of this is a good idea. Mr. Monson said he s glad we talked about the Title 5 issue and will look into it. Mr. Monson continued his update: Member Life Program o Program has had some high claims is the last few years o Put in a 15% rate increase effective October 1, 2016 o Announced the increase with a letter; only got one complaint o Have not seen a lot of increase in premiums; only implemented increase in fourth quarter for 2016 o Premium continued to decline; hopefully decline will be a little less this coming year o 2016 was positive for claims and ended with a surplus of about $114,000 which was put back into the premium stabilization reserve o Now the reserve is almost at the 35% minimum o With the rate increase and replenished reserve, we should be in a pretty good place to continue going forward 4

5 Mr. Szafranski commented that given the size of the plan, now that it has shrunk and it is a $200,000 plan and there are high limits, you will see quite a bit of lumpiness in the loss ratios going forward. He said we want to try to manage this as long as we can, but over time it may become a substandard pool of people toward the end. Maybe, it will come to a point in the future that it is time to terminate the program. Gen Hargett commented that as they watch this going forward, would we not be better to watch it close enough that you do a small raise more often as opposed to a 15% all at once. Mr. Szafranski said if you do that you may force more of the healthy people to exit the program. He said you may get a little extra money along the way, but he is not sure you are solving the problem. Gen Ross wanted to clarify that the program is neutral, not making money or losing money. Mr. Sazfranski said that is true. Mr. Monson continued his update: Administrative Activities o Working with 150 input site locations o Maintain open enrollment and application forms o Issuance of certificates is now fully automated; only five states left to upgrade o Have agreement with DFAS system regarding electronic information and electronic payments Marketing activities: o Support various conference throughout the year o Support HRO s with open enrollments o NGAUS Partnership Program with state associations; now have 28 participating states o VOYA doing a lot of branding across a lot of different channels (i.e., social media and search engines) Mr. Monson concluded his update. COL Deering asked how you go about getting payroll deduction in DFAS. Gen Hargett said there is a whole folder and how it was codified into law just like SGLI. Mr. Monson said there is a file that states we need to be offering the technician plan to technicians mandated through Congress many years ago. Mr. Yoakum asked about the Partnership Program and if it is with the officer associations or the enlisted associations. Gen Hargett said there are probably more officer associations than enlisted associations. Luke said there are also some joint associations who participate. 5

6 Mr. Yoakum said he has not heard about this incentive. He asked if this is something EANGUS can market. Luke said he would be glad to help EANGUS with this program. Mr. Yoakum said they are looking for ways to help their states associations to increase their revenue and this is one way to do that. Gen Hoyer said to add this to the tasker list to get an update from Frank and Luke as to the progress on how they are making this opportunity available to EANGUS. Gen Hargett said the new contract with EANGUS allows for a financial incentive also tied to increased membership. New Business: Voya Proposal: Mr. Walt Szafranski At the November meeting he raised some questions about the NGAUS Insurance Trust which was established in 1977 and is domiciled in Minnesota. His specific question was if NGAUS had any intention or modifying the Trust, moving the Trust to a different jurisdiction, possibly to DC, or terminating the Trust and issuing the group policy directly to the association. He asked that question because over the past several years there has been a lot more scrutiny by state insurance departments regarding group insurance programs issued to Trusts. There has been quite a few fictitious groups established purely for the purpose of obtaining insurance and provide no other service than to sell insurance on a group basis. Insurance regulators do not like those arrangements and they are prohibited in many states. The word trust is associated with a negative situation right now. Having a group policy issued directly to the association is cleaner. However, the question was raised that if it is decided to go down that course what type of indemnification would VOYA be able to provide to NGAUS so that NGAUS in the case of a claim will be held harmless. He has learned that we have other Non-VOYA insurance programs issued to the Trust, so it would appear to have a need to continue to maintain the Trust for the other programs. He has been in discussions with his lawyers and compliance people and they are landing at the Trust is forty years old predates many of the requirements that apply to Trusts these days. He said the type of Trust we have is a single association Trust. He said the nonsponsored Trusts are the ones the fictitious groups focus on. He said this Trust would be deemed eligible for group insurance on its merit in every state, they have come to the conclusion that the current structure is sound with very little risk and with no advantages to moving it from a Trust directly to the Association. Recommend no changes are made and continue the program as status quo. Walt commented it is the 40 th anniversary for VOYA as the insurance underwriter for NGAUS. Taskers: Luke and Frank will get together on the incentive payment for the Partnership Program Luke and Dave to look at the implications and eligibility of Title 5 employees 6

7 Gen Hoyer entertained a motion to adjourn. Col Deering so moved. Luke commented on the MOU for the Partnership Program that 28 states signed. They will partnership with VOYA to target new technicians to the program for the states who already participate as well as new states. Gen Hargett suggested they meet with Frank Yoakum next week to talk about marketing the Partnership Program. Col Renaghan seconded motion to adjourn. Motion carried. 7