Volume 26 Issue 12

December 2016


www.pacounties.org

INSURANCE MATTERS
An e-newsletter of the County Commissioners
Association of Pennsylvania Insurance Programs

 

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We are ending the year with  BIG news from PCoRP, one of CCAP's oldest member service programs, and the largest. As announced at the 2016 Annual Meeting, held during the CCAP Fall Conference, the membership will be receiving a two million dollar dividend in December. This is the sixth year in a row PCoRP has returned surplus funds to the members - over that time the dividends have totaled $13 million! The board also approved continued funding for the PCoRP Loss Prevention Grants, another $750,000 ($15,000 per member for 2017-18) for the fifth straight year. That brings grant funding to three million dollars over five years.

And finally, we are moving forward with the Prison Electronic Documentation project. PCoRP, as part of its risk management program, has set aside a substantial sum of money to acquire electronic documentation programs for members' prisons. PCoRP is offering this opportunity to members in an effort to assist members in accurately and timely documenting interaction with inmates, including documenting suicide checks, the administration of meds and doing rounds. The program can be tailored to fit the needs of your facility and to capture the information that you believe needs to be captured. The goal is to replace the old paper system, which suffers from being incomplete, inaccurate, not timely, not legible and lost, with an electronic documentation program.

Although PCoRP is making this program available to members, it is optional; members are not required to participate. The program is just another way that PCoRP attempts to help its members manage risk, while at the same time, giving back to members.

We anticipate this will be a three year program, and at some point we will notify the members of the final date to make a decision about whether or not to install one of the electronic documentation systems. Once that deadline is passed, unused funds for the system will no longer be available.

PCoRP has identified two programs that it will make available to members. The choice is yours as to which program you believe best fits the needs of your facility. Both companies, Guardian RFID and TimeKeeping, made presentations at the CCAP Fall Conference, and can provide more information about their products so PCoRP members can make a decision about this project.

All combined, in the last five years PCoRP has committed $17.8 million in returns to the members in one form or another!

Make sure you contact us when you need help with something,

                                 John Sallade
New County Risk Transfer Manual
By: John Sallade, Managing Director, Insurance Programs

A new publication for counties is available on the CCAP website. The CCAP Insurance Programs Risk Transfer Manual was completed in October, and after review at the annual meeting of the CCAP insurance producers, and a November Risk Transfer Workshop, is now available to all CCAP members.

The purpose of this Risk Transfer Manual is to provide members with a guide to use when considering risks and evaluating administrative, management and other options related to county operations. Information on establishing and drafting insurance, indemnification and hold harmless provisions for contracts with third parties are included. These provisions are commonly referred to as the "risk transfer clauses" of a contract or agreement.

CCAP's insurance pools and programs provide these model guidelines based on their experience and other resources and factors. It is intended as a reference point for our members. It is not meant to create or suggest absolute requirements. Flexibility and understanding must be tempered with good judgment in establishing provisions that are agreeable and attainable for those involved in the process, the county and the entity with which it is contracting.

Most of the risk issues mentioned in the manual are related to property and liability risks. Each risk and contract comes with its own unique set of conditions and circumstances. No guideline, no matter how complete, is appropriate for all situations. Members using these guidelines are urged to solicit assistance from risk management and legal professionals as the situation dictates.
PComp Announces 3.9% Rate Reduction for 2017!
By: John Sallade, Managing Director, Insurance Programs

PComp members will be seeing lower rates for 2017. The overall rate reduction of 3.9% was approved by the Department of Labor and Industry in early November, and renewal information will be sent to all PComp members in early December.

Rates for each payroll code will change, with the overall result being a 3.9% decrease in costs to the members. Total premium for the 53 members of PComp will be a little more than $7.6 million, down $114,410 from last year. Individual members will see an increase or decrease based on their payroll comparison to the prior year, and any changes in their experience modifications. The changes by member range from a reduction of 33% to an increase of 38%

Questions about PComp can be directed to Karen Cohen at CCAP.
Unemployment Compensation Act Changes
By: John Sallade, Managing Director, Insurance Programs

Changes recently made to the state's unemployment compensation law are intended to expand benefits to seasonal workers, and may also save counties on benefit costs in the coming years.

House Bill 319 became Act 144 on November 3, 2016, and its main focus is to help to ensure that seasonal workers and those who need unemployment insurance will have better and more efficient access to those funds. While there are many people who need unemployment insurance to get them through periods of unemployment, seasonal workers in industries such as construction utilize these funds to make it through the winter months. The state estimates that nearly 44,000 additional people will be covered in the event they lose their job or cannot find work.

Previously the unemployment compensation rules mandated that 49.5% of wages must be earned outside the highest quarter of earning for an individual to receive unemployment insurance. It was felt this percentage was prohibitively high and left many individuals and families of seasonal workers without UC benefits to cover leaner work months. The changes approved lowering that bar to 37% of wages earned outside the highest quarter.

To pay for this change, the Act initiates several cost saving changes to ensure that Pennsylvania's UC trust fund remains financially solvent. They include an across the board two percent reduction in unemployment benefits, which is estimated to provide $44 million in annual savings. Also there will be slowed growth in future benefits, which is estimated to save at least $400 million annually.

To ensure that the fund's health continues to improve a series of triggers have been included to address any decline or stalled growth of the funds reserves. The amendment also includes several updates to the laws fraud provisions to further protect the integrity of the system.
UC Trust Board of Trustees - Commissioner Jeff Snyder and Commissioner Jeff Thomas re-elected!
By: Desiree J. Nguyen, Deputy Director, Insurance Pool Operations

The nomination process for the UC Board of Trustees was completed in October. Since there were only two nominations for the two open positions on the board, incumbents Jeff Snyder, Clinton County Commissioner and Jeff Thomas, Huntingdon County Commissioner have been declared re-elected for another two year term. Commissioner Snyder will remain the sixth Class Representative and Commissioner Thomas will remain the At Large Representative. Thank you to the membership for your nominations and to Commissioners Snyder and Thomas for your continued dedication and service to the UC Trust Board of Trustees.


Fall is here and the leaves are changing, but is your organization prepared for the winter?

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2017 Center for Excellence in County Leadership (CEL)
By: Mandi Glantz, Director of Member and Vendors Relations

CCAP is pleased to present the 2017 Center for Excellence in County Leadership (CEL) program to help county officials develop a professional culture for county government. Strong leadership is essential to county success and future growth. The CEL Program offers county commissioners or council members, chief clerks, county administrators and solicitors in Pennsylvania's 67 counties the opportunity to be immersed in an intensive leadership curriculum which will enhance personal and professional growth. The program features curriculum including managerial versatility, interpersonal dynamics, crisis communication, media management, problem solving, decision making and more.

The two and a half-day intensive program will be held at the CCAP office in Harrisburg on June 14 - 16, 2017. We invite you to explore this exciting educational opportunity offered exclusively by the County Commissioners Association of Pennsylvania (CCAP). Participation is available to one eligible person per county per year, with a maximum of 16 participants per year. Application is required by January 15, 2017 to be considered for participation in the June 2017 session.

More detailed information and an application are available on the CEL homepage or brochure and application.

We invite you to be involved in this exciting program!

Please feel free to contact CCAP directly with questions.
Upcoming Events 

PCoRP Retreat and Board Meeting
January 18 - 20, 2016
The Hotel Hershey, Hershey

COMCARE PRO SAC Meeting
January 25, 2016
CCAP Office, Harrisburg

PELICAN SAC Meeting
January 26, 2016
CCAP Office, Harrisburg
HOT TOPICS: Extra Expense

Extra Expense is one of those "exciting" insurance terms that seems simple, but is often tricky to understand. The term generally applies to property insurance. Here's the equally exciting definition of Extra Expense:

Commercial property insurance that pays for additional costs in excess of normal operating expenses that an organization incurs to continue operations while its property is being repaired or replaced after having been damaged by a covered cause of loss.

So what does this mean? Here are a couple of examples should help explain the cost:

A county courthouse is severely damaged by a small microburst (almost a tornado) and the upper floor is now not usable until repaired. The lower floors of the courthouse are fine, but of course the upper floor contains the county's two courtrooms. During the six months it takes to repair the roof and upper floor, the county has to find an alternate location in which to hold court and for the court related employee offices. The cost of that temporary space is covered by Extra Expense coverage.

The second example is a county building damaged when a pipe breaks. In addition to all the cleanup and repairs, which are covered by the county's property insurance, a few months later the county notes that their water bill for the month when the pipe burst, is much higher. That additional cost - which the county would not have had but for the claim - is covered under Extra Expense. The county will need to provide copies of two or three prior water bills to allow determination of the difference in cost to be reimbursed to the county.

Counties should look at their limits for Extra Expense and consider what types of costs might be involved with events such as those described above. PCoRP members have Extra Expense coverage up to $10 million per occurrence.

For more information, contact Karen Cohen at CCAP.
Quote of the Month
 
   "The pessimist complains about the wind;
the optimist expects it to change:
the realist adjusts the sails."

-WILLIAM WARD
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Contact Us: John Sallade, Managing Director, CCAP Insurance Programs