Tag Archives: insurers

Healthcare Reform and the Courts, Part 2

This is the second article in a 3-part series on Healthcare Reform and the Courts. Preceding and subsequent articles in this series can be found here: Part 1 and Part 3.

How The Florida Court Ruled
The Florida Court agreed with the states on both counts. Basically, the court said that the government cannot compel people to engage in an activity like buying health insurance. That authority is left to the states. And they agreed that this portion of the Patient Protection and Affordable Care Act was not severable and, therefore, the whole thing is unconstitutional.

The court’s rationale here was interesting, I thought. The reality is that Congress passes a lot of laws that do not include a severability clause. And yet many of those laws remain in place after the court has ruled against certain provisions of them because severability is implied. The courts, not wanting to thwart the will of the people via their elected representatives know that throwing out every single law because of problems with certain sections would create a logjam in government and nothing would get done. So the courts prefer not to do this.

But judges don’t automatically assume severability. They go back to and research any documentation they can get their hands on to determine whether or not lawmakers intended to include severability in the legislation. And that’s just what the Florida judge did with the Patient Protection and Affordable Care Act.

So what did he find? He found that a prior draft of the Patient Protection and Affordable Care Act did include a severability clause which meant that for some reason, someone pulled it out when the final version was reported out of Congress — possible evidence that Congress did not mean for the Patient Protection and Affordable Care Act to include severability.

Additionally, the judge did more homework and then came across news clips of the President of the United States talking about the importance of the individual mandate and saying that without the mandate, everything else including the provisions that mandate carriers to provide guarantee issue coverage with no waiting period on preexisting conditions would collapse. We can’t force carriers to do this unless everyone is covered, he said.

Congress pulled the severability clause from a prior draft of the law and the President was publicly quoted as saying that without the mandate, other aspects of the law won’t work. So the judge concluded that legislators felt that you couldn’t have one without the other. And that’s why the Florida judge cited in his reasoning that the ruling that the individual mandate is an overreach and, therefore, the whole thing must go down with it.

With the judge ruling against the feds and striking down the Patient Protection and Affordable Care Act, the feds appealed to the District Court of Appeals.

The District Court of Appeals Ruling
Three judges were involved in the ruling of the district court — two Democrats and one Republican. Basically, one of the Democrats and a Republican agreed with the Florida judge on the mandate.

And they carried the argument one step further. If the Patient Protection and Affordable Care Act’s individual mandate is left to stand, then where do the feds stop? If a person’s coverage status affects the financial health of the overall healthcare delivery system, then why not compel him to workout, eat better, etc, etc, etc?

Not stopping the mandate opens the door for the federal government to impose all kinds of requirements on citizens that the government deems beneficial to overall society. Where does federal authority stop? Allowing the individual mandate to stand would be tantamount to opening a giant door for additional federal influence over states’ rights.

But the appeals court disagreed with the Florida judge over the severability clause. The court said that standard protocol within the House of Representatives assumes that most legislation is severable and that a specific clause isn’t always necessary.

The court was sensitive to the impact on the insurance industry if carriers are required to take all applicants with no waiting periods on preexisting conditions with a mandate. But the judges didn’t think this was all that important given that most of the people the mandate would apply to already have coverage. Those who don’t have coverage now, they said, are those who would be eligible for Medicaid and individual subsidies.

So if the bulk of the population the mandate would apply to is already insured, then the mandate is not really that important (they did not address the scenario where people may opt to drop their coverage if they know they can get it anytime when they really need it).

So now we have a bit of a disagreement between the Florida court and the appeals court — not to mention all the other Patient Protection and Affordable Care Act-related lawsuits that are being litigated in other courts throughout the county. Conflicting views and directives from a law as expansive as the Patient Protection and Affordable Care Act is not conducive to harmonious execution of the provisions of that law. Given the two different rulings, what is a given state to do? Do you follow through on the mandate or not? Do you begin building the exchanges or not? You have one court that says no and another that says kind of. It is for these reasons and many others that people believe the next stop is the Supreme Court.

The Total Cost of Your Insurance Program, Part 4

This is the fourth article in a five-part series on understanding the total cost of your insurance program. Preceding and subsequent articles in this series can be found here: Part 1, Part 2, Part 3, Part 5.

As an illustration of the principles discussed so far, we offer these service level guidelines which have been developed by InterWest Risk Control for both Property & Casualty and Workers’ Compensation clients:

Property and Casualty Service Level Guidelines (not including Workers Compensation)

Due to the significant variable revenue levels generated from either a mono-line or multiple lines of coverage (fire, inland/ocean marine, boiler/machinery, general liability, products liability and completed operations, auto liability, etc.) any client generating at least $10,000 in revenue would qualify for risk control service.

Based on the above, for all Property & Casualty requests, please contact your InterWest Risk Control Consultant to determine your customers’ needs and services and timelines including the following:

Property Protection/Fire Prevention

  • Interpret and prioritize insurance company loss control recommendations.
  • Evaluate sprinkler system installations utilizing NFPA 13, 231, and 231C.
  • Assist clients with automatic sprinkler system and fire hydrant testing.
  • Analyze building valuations and construction class codes.
  • Site inspections and audits including: cooking equipment, spray painting, flammable liquids and chemical storage, indoor/outdoor pallet/tire storage, in-rack arrangement of stock.
  • Course of construction/builder’s risk accounts for fire prevention and security.

Boiler and Machinery Protection

  • Interpret and prioritize insurance company loss control recommendations.
  • Determine state operating permit criteria based on objects such as high/low pressure steam boilers, air tanks, LPG tanks, storage water heaters, etc.
  • Provide on-site consultation of machinery and equipment, unique business interruption exposures, and preventative maintenance and inspection activities and forms.

General and Public Liability

  • Interpret and prioritize insurance company loss control recommendations.
  • Provide on-site assistance for life safety concerns with risks such as educational institutions, restaurants, hotels and motels, shopping centers, office properties, and residential risks.
  • Evaluate public safety such as emergency exits and lighting, walking surfaces, ramps, stairways and steps, lighting, guardrails and handrails, maximum occupancy limits, and similar items.
  • Assist with complying with the Americans with Disabilities Act (ADA).
  • Analyze public injuries and illnesses to determine loss trending and corrective measures for preventing reoccurrences.
  • Attend and participate at supervisory and management-type training sessions to provide information on accident investigations and accident review board committees as well as follow through on any relevant loss prevention remedies arising from these sessions.
  • Evaluate playground equipment for parks and school risks.

Product Safety

  • Interpret and prioritize insurance company loss control recommendations.
  • Coordinate loss control activities between insurance companies and clients for loss prevention services.
  • Review existing quality assurance and control manuals relating to standards such as ANSI, ASME, CPSC, voluntary industry product safety guidelines, etc.
  • Provide on-site plant tour and analysis of manufactured products. Evaluate quality control measures, plant reviews, blueprints, and drawings.

Fleet Safety

  • Interpret and prioritize insurance company loss control recommendations.
  • Provide clients with technical information on DOT and CAL-OSHA regulations.
  • Specifically offer the following services for our clients:
    • Audit fleet safety program including driver selection, vehicle inspection and maintenance, accident investigations, motor vehicle record check criteria, driver logs, etc.
    • Perform on-site surveys of vehicles, inspection and maintenance activities, and premises.
    • Complete vehicle observations and evaluations of straight trucks, cab-overs, private passenger automobiles, and tractor/trailer rigs for backing, lane changing, following distances, and speed of travel.
    • Review driver qualification files with management to determine driver logs, Commercial Driver License, physical examination, written/road test certification, safety incentives and awards, and similar documents.
    • Perform “ride-alongs” with company drivers to evaluate speed of travel, following distances, lane changes, backing, product control and security, and customer interfacing.
    • Attend and participate at fleet safety meetings and accident review board committees on defensive driving topics, vehicle losses, and accidents, and safety incentive awards, etc.

Additional Services

  • Access to defensive driver training, property management, online risk management training on InfoSource Café (InterWest’s extranet to provide clients with important resources to be better prepared for dealing with emergencies, to find answers for Cal-OSHA compliance issues, to improve their injury prevention efforts, to manage risks associated with property and products, and to maximize value of employee benefit programs)
  • Access to fleet safety videos including defensive driver (fee may apply)
  • Disaster response plan development and review.
  • Sexual harassment prevention training for managers/supervisors and employees.
  • HR consulting available (may be fee based).
  • Customized inspection/audit forms for buildings, equipment, vehicles and premises.
  • “Tailored” forms for accident investigation and training, including property, liability, and fleet.
  • Liquor Liability awareness training.
  • Assist in determining root causes of losses and accidents with internal and external claims departments.

Workers Compensation Service Level Guidelines ($4,000 – $20,000+ in Revenue)

InterWest brokers can also use a Service Time Line Report (including above risk control service levels) once agreed upon between the customer to monitor activities from risk control, claims, accounting, etc. Here is a sample Service Time Line Report.

Loss Control Service Level: Level I
Total Revenue: $4,000 to 6,500
Description of Service Levels/Sample Services

Contact will be informal, Access to all appropriate services via InfoSource Café, phone consultation and workers compensation safety survey/audit. Follow up on a consultative basis and electronic review of current safety plans and newly completed templates for accuracy and detail. They will be invited to participate in regional workshops and safety webinars.

Loss Control Service Level: Level II
Total Revenue: $6,501 to 12,500
Description of Service Levels/Sample Services

One to two visits annually based on need; Contact will be formal and informal, will receive a formal safety/audit and review, receive written recommendations for priority based services, safety one-on-one training for supervisors, specific safety training based on need. Follow up on a consultative basis and electronic review of current safety plans and newly completed templates for accuracy and detail. They will be invited to participate in regional workshops and safety webinars. Loss control to provide recommendations for the written service timeline.

Loss Control Service Level: Level III
Total Revenue: $12,501 to 20,000
Description of Service Levels/Sample Services

Two to four visits annually based on need; Contact will be formal and informal, will receive a formal safety/audit and review, receive written recommendations for priority based services, safety one-on-one training for supervisors, specific safety training based on need. A loss control representative will be available to sit in on claims reviews, follow up on a consultative basis and electronic review of current safety plans and newly completed templates for accuracy and detail. They will be invited to participate in regional workshops and safety webinars. Loss control to provide recommendations for the written service timeline.

Loss Control Service Level: Level IV
Total Revenue: $20,001 and Up
Description of Service Levels/Sample Services

Minimum four contacts with the client and service open based on need and structured service plan. Loss control representation will be available to sit in on claims reviews.

Related Articles
The Total Cost Of Your Insurance Program, Part 1
The Total Cost Of Your Insurance Program, Part 2
The Total Cost Of Your Insurance Program, Part 3
The Total Cost Of Your Insurance Program, Part 5

Authors
Dirk Duchsherer collaborated with Jim Newberry (CHST, Bsc Safety Management) in writing this article. Jim is the AVP and Risk Control Manager for Island Insurance Company, LLC in Honolulu, Hawaii.