Making a Benefit Plan
by Gary Sawatzky, COO
A lot of thought goes into making the ARTA Benefit Plans. They are reviewed by ARTA staff, the Health Benefits Committee, and the Board of Directors to ensure they continue to meet our members’ needs, both in terms of their coverage and the financial realities of the plans’ incurred costs.
We review premium rates annually to ensure they are appropriate to cover claims and overhead costs for the upcoming year. ARTA’s health and dental benefits are self-insured, meaning ARTA is
responsible for calculating and setting the monthly rates paid by covered members for each plan. We do this by comparing the annual premiums paid into the plan with the amounts paid as claims over the past twelve months. We also include an inflationary factor because — as we know too well — costs always seem to go up, but never down. This calculation is done for each benefit and for each of the Education and Public/Private sectors covered under ARTA’s plans. There is no cross-subsidization between the two sectors; each one pays monthly rates based on the claims experience for their specific sector.
Each year, the Health Benefits Committee considers two or three scenarios for potential rate changes, which often depend on the experience of the past year. For example, for the 2021 renewal
year, the premiums paid into the plan exceeded (by a fair margin) the amount that was paid out through claims and overhead. This meant a rate reduction could be implemented, which was the option selected by the committee. The opposite was true for the Dental Care plan, and the committee chose a modest rate increase for the Education sector and no change to rates in the Public/Private sector.
The Emergency Travel rate component is renewed differently. This benefit is fully insured, which means the monthly rates need to be negotiated with the insurance underwriter. The negotiated monthly rates are then included in the appropriate Extended Health Care monthly rates. Once all rates have been reviewed, and the suggestions have been put forward, the Board of Directors considers the suggestions at their summer meeting. The new rates are implemented on November 1 of the same year.
When the Health Benefits Committee sets rates each year, plan design changes also need to be considered. Plan design includes adding or removing coverage for specific medications or services, based on member needs.
All suggestions for plan design changes are gathered from members themselves. The committee evaluates each suggestion to determine if it would be appropriate for coverage under the plans. The
committee also considers any legislative or public plan changes made over the past year that could affect the ARTA plans.
Suggestions that would benefit many people are most likely to be considered during the summer Health Benefits Committee meeting, when each one is reviewed thoroughly (including the cost impact of implementing the change). The committee then decides which will be recommended to the Board of Directors, who in turn vote on the recommended changes at their summer meeting. Approved plan and rate changes are implemented on November 1.
Once the final plan changes and monthly rates have been determined, ARTA sends a renewal statement to each covered member by the end of September.
This year, all active MyARTA users will receive an email message indicating their renewal communication has been posted and is available to download; they will also receive a paper copy in the
mail. Beginning in 2023, members with a MyARTA account will receive their statement digitally only. Members without a MyARTA account will continue to receive a paper copy in the mail.
The second major communication sent to all covered members each year is the annual Premiums & Claims Statement, which informs each covered member of the amount of premiums paid into the plan each calendar year and gives a breakdown of the claims made by each covered person during that year.
Over to You
I hope this explanation has provided some insight into the inner workings of the benefit plans. It requires a lot of hard work by many different people, all to ensure the plan is designed appropriately to meet the needs of our members, and to make sure that covered members are informed of any plan changes that may affect them.