Summer Staff Medical Claims
By Rick Braschler
While the country wrestles over health-care reform and the Affordable Care Act, camps around the country are beginning to feel the front-line impact of the “not-so-well-known” reforms that have already taken place. One thing is for sure—the buckets that once existed to fund camp-staff injuries are shrinking, leaving a larger bucket for camps to debate over. And this debate is creating a type of “relational friction” between camp leaders and their summer staff that was not present in the not-so-distant past, leaving many to question, “Who’s holding the bucket?”
Bucket #1: Workers Compensation
Once upon a time, a staff claim was covered as long as the injury occurred while at the camp and involved the work activity of the camp. Nowadays, workers compensation reform has redefined aspects of the law, thus changing the compensability of injuries from what used to be covered and may now be denied. For example, if tripping over something was due to your clumsiness and not as a result of your employer, some states will deny the claim. Or, if you fail to use a safety device provided by your employer, the claim may be denied, or at the least, reduced.
Almost every state mandates some level of workers compensation coverage for employers, and camps are not exempt. Workers comp has been under intense scrutiny for the past 10 years in many states, and once the first domino fell, the rest have gone quickly. Initially, there were Texas, Florida, California, Oklahoma, and Missouri, and as recently as this past spring, major reform has been passed in Illinois, Kansas, Montana, North Carolina, and Washington. So what is the catalyst for this reform, and who does it benefit? In many cases, large industry has been pressing state legislators to amend workers comp laws to provide relief to employers, which ultimately results in fewer injuries being covered as compensable.
What does this mean for your camp? In short, what was covered under workers compensation in previous years may not be covered now, or at a reduced amount, thus, passing the buck on to the employees’ personal health-insurance plans. Camps must understand the landscape of their state’s workers comp laws in order to better manage the path of non-compensable claims before they flair up and cause unwarranted friction.
Bucket #2: Personal Health Insurance
Consider these statistics: An employer-provided health plan’s average deductible in 2005 was $770 versus $1,318 in 2015.¹ And, under the Affordable Care Act in 2015, the out-of-pocket costs for an individual maxes out at $6,600.² With workers comp reform possibly denying more claims than before, these costs are sure to be passed off to personal health-care plans for payment. As a result, these increasing out-of-pocket maximums will certainly put a financial burden on summer staff to foot the bill, or be sent to collections.
What does this mean for your camp? Camps must develop a strategy for identifying the level of staff insurance coverage available by working with local health providers to properly code and report these claims and by utilizing the plan correctly. For example, most summer staff claims are considered emergency visits rather than a scheduled procedure, and thus would fall under the “Emergency” or “Urgent Care” copay, thus lessening the overall out-of-pocket expense.
Bucket #3: Camp Primary Or Secondary Accident Insurance, Or Assistance Programs
Many camps have historically provided an accident/illness policy for staff and campers, or have simply been charitable when it came time to help out. However, this added benefit is on the chopping block as many camps are struggling with the bottom line due to the economy and the lack of needed financial support. According to a recent Barna survey, the number of adults who give to charities has dropped 17 percent since 2008. Additionally, with the cost of medical care continuing to trend upwards of 10 percent per year, it is becoming more difficult to afford not only the accident insurance, but also a way to be charitable. Increased operating costs, declining enrollment and/or contributions may greatly impact a camp’s ability to offer a camp-funded mechanism for staff health-care costs. Fewer compensable or reduced workers comp claims and higher deductibles and co-pays have forced larger than usual amounts to this level of consideration.
What does this mean for your camp? Camps must become creative in searching for funding methods, such as primary and secondary accident/illness plans; utilizing the medical coverage on a general liability plan if applicable; or developing a self-funded reimbursement plan that can help camp families offset these high medical bills.
Bucket #4: Staff Self-Pay
THE BUCK STOPS HERE! It seems logical, right? “How could my child work at your camp, and I end up with a $4,000 medical bill for something that was not ‘our fault’?” Can you blame that parent’s perspective? The average health-care premium cost for a family in 2015 was $17,545, ³ and families paid almost $4,955 of this premium. Staff families bear the brunt of the shifting paradigm in health-care funding as a result of these reforms and cost-cutting maneuvers. The consequence is a relational friction that develops between camp leadership and staff, which may end the relationship, or at worst, end up in a courtroom. It’s not an “if” but a “when” question as to how often the camp will be on the receiving end of a staff person’s stating that he or she made very little money working at the camp, but owe a lot of money due to an illness or injury incurred.
The shifting paradigm of health-care funding continues to realign the size and scope of the funding mechanisms and buckets, while creating relational friction with staff. An effective strategy for claims management and reporting will increase a camp's ability to reduce unnecessary out-of-pocket costs as well as maintain good relationships with staff.
¹ Kaiser http://kff.org/report-section/ehbs-2015-summary-of-findings/
² Healthcare.gov https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/
³ Kaiser http://kff.org/health-costs/report/2015-employer-health-benefits-survey/
Rick Braschler is the Director of Risk Management for Kanakuk Kamps, a Senior Risk Consultant in youth and outdoor recreation, and serves as a subject-matter expert. He is also a licensed broker and claims-specialist assisting camps throughout the country in navigating the complexities of staff injuries and outcomes. Reach him at email@example.com.