Prepared by and distributed on behalf of the Board of Directors of GSA Carleton Inc.
For many years the GSA and CUSA have jointly offered a not-for-profit Health, Dental and Accident Plan (the “Plan”) for students at Carleton University. The cost to students of the current plan has been stable for six years while benefits have consistently improved. Decisions on changes to the plan have been made by the Joint Oversight Committee as established in the Drug/Accident and Dental Plan Agreement (2000) between the GSA and CUSA. In 2011, CUSA and the GSA signed a three year agreement with the broker, Morneau-Shepell, and by extension Green Shield Canada, the only national not-for-profit health plan provider.
In late June, 2012, the GSA was made aware that the Vice-President Finance for CUSA, Michael De Luca, was attempting to unilaterally withdraw funds from the joint reserve fund. This fund is held in trust by Green Shield, and can be used to off-set the costs of the not-for-profit plan if claims reach unexpected levels (for example, if there was a pandemic). At a subsequent meeting, CUSA VP Finance Michael De Luca and CUSA President Alex Golovko indicated to the GSA that CUSA has been negotiating behind the scenes with a private for-profit health plan broker. The CUSA representatives also indicated their intent to break the current agreement with Morneau-Shepell and potentially break a separate agreement with the GSA. The CUSA representatives provided an ultimatum to GSA representatives that did not include the option of continuing with the current plan or respecting existing plan agreements. Furthermore, it was stated that CUSA would not reveal the broker for the alternative plan or any details about the plan unless the GSA first agreed to break its existing contracts, and switch to the new plan.
The GSA Board’s primary focus is to make sure our members are receiving the best value and service from this program. Therefore, the GSA sent a number of important questions and requests for information to CUSA to determine if this program provides superior value. CUSA has not responded to any of the GSA requests for additional information on plan design, coverage levels, broker/insurer fees/commissions, etc.
The Board of Directors of GSA Carleton Inc. want to assure members that no change to the Health, Dental and Accident Plan will be made without seeking multiple tenders, a rational and transparent process, consideration of existing legal agreements and, most of all, a comprehensive understanding of the cost and benefits of a new plan, and an independent, professional analysis of the complex details these types of agreements can contain. The Board is concerned that CUSA representatives do not appear to be following a transparent process, may not be considering their members’ best interests, and may not have an understanding of the complexity of health, dental, and accident insurance plans.
Some of the concerns expressed by the Board include:
- The potential legal costs associated with breaking existing contracts without cause.
- The possibility of being held liable for premiums for two separate plans provided by two separate brokers.
- Uncertainty as to whether CUSA is engaging a broker that offers cheap rates for the first year of a multiyear plan and then increases the costs or reduces benefits. The high turnover at students’ unions has not gone unnoticed by predatory for-profit health plan brokers.
- Administration of the plan. To-date, CUSA has not hired a Health Plan Administrator (HPA) following the April departure of the former HPA. The plan operates on a September 1 to August 31 calendar. The ability to opt-out of the plan normally begins in mid-August. Under the existing agreements the GSA and members of the plan pay CUSA to have an on-campus HPA. The uncertainty and the possibility of poor service associated with a switch in health plans at this late date is not acceptable to the Board of Directors of the GSA.
The Board of Directors is taking the following steps to address this matter:
- Holding regular meetings and addressing the issue with GSA Council.
- Ensuring legal representation that is informed and available.
- Continuing to request information from CUSA regarding its intentions and details of the alternate plan supported by CUSA representatives.
- Seeking a commitment from Morneau-Shepell and Green Shield that all reasonable efforts will be made to ensure GSA members will not experience service disruptions should CUSA attempt to break existing contracts or fail to fulfill its obligations with regards to the frontline administration of the plan.
- Planning to approach the administration of Carleton University to access the required data to ensure GSA members are enrolled in and can access benefits of the Plan.
- Ensuring that the GSA will not be liable for the actions of CUSA should the broker initiate legal proceedings as a result of CUSA attempting to terminate the contract.
- Investigating all options for recourse should CUSA attempt to terminate existing contracts.
- Ensuring that any reserve funds are not released without the consent of the GSA, and to seek a court injunction to this effect if necessary.
Thank-you for taking the time to read this Membership Advisory. As has probably been made clear from this Advisory, insurance plans are complex financial and legal arrangements. We hope that this message has made it clear that the GSA will continue to act in the best interest of its membership. If you have any questions, or you wish to offer feedback regarding this Advisory, please contact Kelly Black, GSA President, at email@example.com.