NMPSIA Fall Update Continued...
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Chris Parrino
who provide services for the following: brokerage, consulting, administration, actuarial and claims management. These groups, along with staff, meet once a month reviewing coverages, claims, loss trends and loss prevention services to ensure NMPSIA provides the broadest coverage available and the best service possible.
Within the Risk Program, there are many areas of loss control issues addressed almost daily. For example, several years ago, NMPSIA and Poms and Associates focused on poor roof conditions. The focus included working with PSFA and the PSCOC. Increased attention and funds have significantly improved the condition of roofs and had a direct result of decreased water damage claims.
NMPSIA’s efforts to focus on playgrounds, a leading cause of serious injury among children, has also led to an expansion of PSFA review. The hope is that an increase in funding will ultimately reduce the risk and affect the stability of the pool.
NMPSIA, through its contract with Poms and Associates, has spent the last year focusing on school violence. Included in this focus is a serious discussion around arming school employees. NMPSIA and Poms and Associates drafted and distributed guidelines for all Members to adhere to and ensure that if Districts decide to have armed personnel, they first look at hiring School Resource Officers; second, hire private security, and if these two are not feasible, then third, make sure employees maintain a Level 3 Security Certificate. This has been a top priority, heightened by the fact that Aztec School District had a fatal shooting this year. NMPSIA’s main efforts are to provide consulting services that help to ensure the safety of children and employees.
Another area of focus in the Risk program has been the development of a Boundary Policy. Much to NMPSIA’s chagrin, it was discovered that school districts did not have an effective policy that spelled out all the do’s and don’ts, as well as both legal and moral responsibilities of educators and their duty to report misbehavior. A policy was adopted by the NMPSIA board and distributed for District to adopt.
In the last couple of years, NMPSIA has funded and supported CES with a TAP program that assists districts with special education issues, such as IDEA and IEP’s. This has been a very successful program and NMPSIA has continued its support and expand the program. NMPSIA is always looking to improve education and programs to avoid employment practice claims and to ensure the due process rights of employees along with ultimately providing a safe environment for our children to learn. All of these initiatives involve great teamwork between staff and their consultants. If you have any concerns related to risk matters, please contact Richard Valerio at NMPSIA.
Financial Overview
NMPSIA has recently been working diligently to close the books for the fiscal year ending June 30, 2018. The Employee Benefit Fund recognized a gain of $3.6 million during FY18 and an unaudited fund balance of $17.2 million. NMPSIA’s target fund balance is one month of claims, or approximately $24.1 million. NMPSIA’s average annual medical spend trend is 4.76%, as compared to 7.61% nationally. The average annual prescription drug spend trend is 7.06%, as compared to 8.36% nationally. The NMPSIA Board of Directors initially approved a 7.40% premium increase to the High Options and EPO plan, a 0.70% decrease to the Low Option plans, and a 5.00% increase to the High and Low Option Dental plans, effective October 1, 2018. The NMPSIA Board carefully reconsidered the premium rate increases and decided to pass on a 4.00% premium increase to the High Options and EPO plan, and a 0.70% decrease to the Low Option plan, with no increase to the Dental plans. This rate increase is expected to generate $296.3 million in revenue for FY19, resulting in a projected $17.2 million (0.7 months of claims) fund balance at the end of the fiscal year.
The Risk fund recognized a gain of $13.3 million during FY18 and an unaudited fund balance deficit of $879 thousand. The beginning fund balance deficit was attributed to $16 million being swept from the Risk Fund cash reserves during the recent special legislative sessions. The NMPSIA Board of Directors approved a cumulative 6.20% increase in billed premiums for FY19. The Board reconsidered this increase and decided to pass on a 3.90% cumulative increase, which will generate approximately $80.8 million in revenue. Fund balance is projected to remain at a deficit of $321 thousand at the end of the fiscal year. However, current cash reserves are sufficient to pay projected claims. NMPSIA’s strategy is to replenish fund balance within a 5-year period.
If you have any concerns related to financial matters, please contact Richard Valerio or Mr. Patrick Sandoval at NMPSIA.