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HomeMy WebLinkAboutMINUTES - 05251993 - 1.59 1 -59 BOARD OF SUPERVISORSContra ,1T' FROM: Phil Batchelor, County Administrator Costa Count DATE: May 25, 1993 >;;:_:_ Y SUBJECT: Authorize Procedural Changes to the lst Choice Employees ' Benefit Trust Plan Document SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: Authorize the Risk Manager to notify the Joint Board of Trustees in writing that County agrees to the three recommended changes of a procedural nature to the Plan Document and that the County waives its right to meet and confer over these issues. BACKGROUND: The Joint Board of Trustees of the Contra Costa County lst Choice Trust has recommended to the bargaining parties that three modifications of a procedural nature be made to the lst Choice Trust Plan Document. Pursuant to the Trust Agreement, these changes can be made by joint written action of the County and a majority of the Employee Organizations provided that the membership of the organizations agreeing to the amendment comprise at least fifty percent of the employees divided into bargaining units. Staff reviewed the proposed changes and recommends the modifications and waiver of the right to bargain. The three recommended changes involve: 1. Third party liability, with the intent of the change being to clarify the obligation of a member to reimburse the Trust in situations where the member has been injured by a third party and receives compensation from the third party for those injuries; 2. Modifying the Trust's claim appeals procedure to include consideration of appeals by the Joint Board of Trustees of the lst Choice Employees' Benefit Trust; and 3 . Clarify the requirement that parents of a dependent child over the age of 25 will provide proof of incapacity and dependency to the Plan Administrator within 31 days of a written request by the Plan Administrator. The attachment shows modifications to the plan document language. CONTINUED ON ATTACHMENT: X YES SIGNATURE: ' RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOA CO MITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON APPROVED AS RECOMMENDED _e�_ OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISO N THE DATE SHOWN. Contact: Joseph J. Tonda (646-2014) CC: CAO Risk Management p?_jam ATTESTED lst Choice Trust PHIL BATCHEL •CLERK OF 4E BOARD OF (via Risk Management) SUPERVISORS AND COUNTY ADMINISTRATOR Jim Hicks, Chair, Health Care Coalition Personnel Director f M382 (10/88) BY � V DEPUTY 11/19/92 RECOMMENDED PROCEDURAL MODIFICATIONS TO THE PLAN DOCUMENT OF THE CONTRA COSTA COUNTY 1ST CHOICE EMPLOYEES BENEFIT TRUST I. THIRD PARTY LIABILITY A. ISSUE: Health and welfare trusts, whether public sector ones such as the 1st Choice Trust or private sector ones, regularly encounter situations where a member is in3'ured, the trust pays medical benefits for that member, and the member's injuries were caused by the negligence of a third party. Auto accidents are prime examples of this type of situation. The present plan document at Part Thirteen (quoted immediately below) deals with this situation by giving the trust "subrogation" rights. Subrogation generally means that the trust "steps into the shoes" of the member. In our situation, this means that the trust possesses the right to sue the third party for the amount of the medical bills it paid. This, however, is a cumbersome right. The trust is not equipped to commence a number of personal injury lawsuits, and the sums involved are often not large enough to justify such litigation. Moreover, it is almost always the case that the injured member will himself or herself initiate suit against the third party. It is instead typical for health and welfare funds to in essence tag along with the member' s lawsuit by requiring the member to agree to reimburse the trust from any recovery in the suit. This procedure minimizes legal expenses for the trust and leaves the handling of the suit to that party, i.e. the injured member, who has the greatest interest in insuring that the biggest possible recovery is obtained from the third party. B. PRESENT PLAN DOCUMENT LANGUAGE (PAGE 57-58) : PART THIRTEEN: SUBROGATION A. ) Subrogation Right of. the County The benefits of this Plan are available to a Member who is injured by the act or omission of another person, firm or corporation. If the Member receives benefits under this Plan for treatment of such injuries, the County shall be subrogated to the rights of the Member or the personal representative of a deceased to the extent of all payments made by the Plan Administrator for such benefits. 1\contra\mod-129 1 As a condition of receiving such benefits the Member assigns to the County of Contra Costa any rights the Member or the Member' s personal representative may have against any person or entity, including, but not by way of limitation, any Workers ' Compensation carrier or Board; and the Member or Member' s personal representative shall furnish the County in writing the name and address of the party who caused the injuries and the facts of the accident and shall cooperate fully with the County and do nothing to prejudice the County' s subrogation rights. B. ) Collection by Member or Representative Any sums collected by or on behalf of a Member or Member's personal representative by legal action, settlement, or in any manner. , on account of the benefits provided, shall be payable to the County. When reasonable collection costs and reasonable legal expenses have been incurred in recovering sums which benefit both the Member and the County, whether incurred in an action for damages or otherwise, there shall be an equitable apportionment of such collection costs and legal expenses. C. RECOMMENDED PLAN DOCUMENT LANGUAGE PART THIRTEEN: THIRD PARTY LIABILITY A. Condition Precedent If a Member incurs an illness, injury, disease, or other condition for which a third party may be liable or legally responsible by reason of negligence or other legal cause on the part of that third party, the Member, as a condition precedent to entitlement to Plan benefits for such illness, injury, disease or condition, shall execute an 1°Agreement to Reimburse" in a form satisfactory to the Trust. The Agreement to Reimburse shall provide that the Member shall reimburse the Trust in an amount equal to, but not in excess of, payments made or to be made by the Trust under the Plan on account of medical, dental, vision, prescription drug, or other expenses incurred by the Member in connection with or arising out of any injury, illness, disease, or other condition for which the third party may be responsible. The Agreement to Reimburse shall 1\contra\mod.129 2 further provide that this reimbursement shall come only from proceeds received by way of judgment, settlement, or otherwise in connection with or arising out of any claim for damages by the Member or his or her heirs, representatives, parents, or legal guardians. Any Member who refuses to sign such an Agreement to Reimburse in a form satisfactory to the Trust shall not be eligible for benefits under the Plan for any illness, injury, disease or other condition for which a third party may be liable. d' B. Lien A lien shall automatically exist in favor of the Trust upon all sums of money recovered by the Member in connection with any illness, injury, disease, or other condition for which a third party may be liable to the extent of the benefit payments made by the Trust under the Plan. C. Member's Obligations The Member shall notify the Trust in writing within sixty (60) days of the Member's making a written claim against a third party. The Member shall take such actions, furnish such information and assistance, and execute such papers in addition to the Agreement to Reimburse as the Trust may require to facilitate enforcement of the Trust's rights. The Member shall not settle any lawsuit nor do anything to prejudice the rights given the Trust under this Part without the Trust's prior written consent. The failure of the Member to give such notice to the Trust, to cooperate with the Trust, or to sign the Agreement to Reimburse constitutes a material breach of the Plan and will result in the Member being personally responsible to reimburse the Trust. D. Insurance Contracts The Trust is authorized to include the substance of the third party liability provisions of this Part Thirteen in any insurance contract it may purchase using such language as may be acceptable to the insurance carrier. In no event, however, shall the combined liens of the insurance carrier and the Trust exceed the amounts paid to the Member as benefits under the Plan. 1\contra\mod.129 3 II. CLAIM APPEALS PROCEDURE A. ISSUE• The recommended appeals procedure set out below expands upon the present appeals procedure by specifying the role of the trust' s claims administration, U.A.S. , and the role of the Joint Board. Adding these two levels of review should increase the likelihood of resolving -most appeals at the administrative stage. A Member under the recommended appec-as procedure retains the right to go to small claims court for smaller disputes (under $5,000) or to seek arbitration of larger disputes. With respect to larger disputes, the trustees considered it important to insure that a Member seriously consider the merits of his or her claim prior to initiating arbitration. The trustees implemented this policy goal through the limited cost-sharing mechanism set forth in paragraph J of the procedure. B. PRESENT PLAN DOCUMENT LANGUAGE (PAGE 55) : PART FOURTEEN: BINDING ARBITRATION A. ) Any dispute between a Member and the County of Contra Costa regarding any decision or action under the Plan by the Plan Administrator or the County or otherwise with respect to any of the terms, conditions, or benefits of this Plan, must be submitted to binding arbitration unless the dispute is subject to the jurisdiction of the small claims court. This arbitration is begun by the Member making written demand for arbitration on the Plan Administrator not later than one year after the decision, action, or occurrence upon which the demand is based. B. ) This arbitration will be held before a designated neutral arbitrator appointed by the county medical association of the county in which the services were provided. If the county medical association declines or is unable to appoint an arbitrator, the arbitration will be conducted according to the rules of the American Arbitration Association. C. ) Any dispute regarding a claim for damages or other matter within the jurisdiction of the small claims court will be resolved in such. court. D. ) THE ARBITRATION FINDINGS WILL BE FINAL AND BINDING. 1\contra\mod.129 4 C. RECOMMENDED PLAN DOCUMENT LANGUAGE: PART FOURTEEN: CLAIM APPEALS PROCEDURE A. If the Claims Administrator denies a claim in whole or in part, the Claims Administrator will send the Member a written notice of denial containing the following information: (1) the specific reasons for the denial, including references to the relevant provisions of the Plan Document, (2) a description of any additional information needed to process the claim, and (3) a description of this claim appeals procedure. A Member is entitled to review all documents relevant to the denial of the claim. In the case of a sensitive or confidential report, such as a psychiatric or psychological report, the Claims Administrator will obtain a written release from a member's treating health professional prior to releasing the report to the member. B. The Claims Administrator will send the Member the written. notice of denial within ninety days after the claim is filed, unless special circumstances require additional time. If additional time is required, the Claims Administrator will send the Member written notice to that effect within ninety days after the claim is filed. In no event will the Claims Administrator take more than 180 days from the date the claim was filed within which to make a decision. If a notice of denial is not received within the 180 day period, a Member may proceed to the next stage as though the claim had been denied. C. Within sixty days of receipt of the written notice of denial, a Member may request the Joint Board to review the denial by filing a written appeal application with the Joint Board. An appeal application shall state in clear terms the reasons the Member disagrees with the notice of denial and shall include any evidence supporting the appeal application not previously provided to the Claims Administrator. The Joint Board may consider a late appeal application -if the Joint Board concludes that the delay was due to a reasonable cause. D. The Joint Board shall fully and fairly review an appeal application. As part of its review, the Joint Board may review written comments submitted by the Member. 1\contra\mod.129 5 E. The Joint Board shall issue a written notice of decision which shall include the specific reasons for the decision and refer to specific provisions in the plan document. F. The Joint Board will normally render a decision within sixty days after receipt of the appeal application. If the Joint Board notifies the Member in writing that additional time is needed, the 60 day period will be automatically extended to 120 days. If the Joint,,Board fails to respond within the applicable time period, the appeal application . shall be deemed denied. G. The Joint Board possesses full discretion to decide benefit appeals and to interpret the terms of the trust agreement, the plan document, and other documents relevant to a claim. H. If a Member disagrees with the decision of the Joint Board and if the Member's claim is greater than the jurisdictional limit of small claims court (which is $5, 000 as of May 8, 1992) , a Member's exclusive remedy shall be binding arbitration. A Member may request arbitration by making a written demand for arbitration to the Joint Board. The demand must be received by the Joint Board within 70 days after the date on the notice of decision. I. The arbitration will be conducted according to the commercial arbitration rules of the American Arbitration Association. The jurisdiction of the arbitrator is limited to interpreting the plan document. The decision of the arbitrator shall be final and binding upon all parties, including the applicant and any person claiming through the applicant. J. If a Member does not obtain a monetary award greater than the decision of the Joint Board, the Member will then be personally responsible to reimburse the Trust for 50% of the arbitrator' s total fee and for 50% of the other costs of arbitration, including court reporter' s fee, cost of the transcript, hearing room fees, etc. K. If a Member's claim is for less than the jurisdictional limit of small claims court, then the Member' s exclusive remedy is to file an action in small claims court. 1\contra\mod.129 6 L. Any time period set forth in this procedure may be extended or reduced by written agreement of the Member and the Joint Board or the Member and the Claims Administrator. M. A Member shall not have any right or claim for benefits from the Trust except as specifically set forth in the plan document. III. DEPENDENT CHILDREN OVER THE AGE OF 25 .. A. ISSUE: The present plan document provides coverage to those children over the age of 25 who are incapable of working and are dependent upon their parents. One condition in the present plan document for such continued coverage is that the parents provide proof of incapacity and dependency within 31 days of the child's 25th birthday. A parent can easily overlook this 31 day requirement. Although the trustees believe it is important to police the requirements of incapacity and dependency, they also believe that the present 31 day requirement is a trap for the unwary. The language being recommended by the trustees continues the obligation of a parent to provide proof but triggers that obligation by a specific written request from the trust. B. PRESENT PLAN DOCUMENT LANGUAGE (PAGE 49) : Attainment of the limiting age shall not terminate coverage of a child while the child is and continues to be both (a) incapable of self-sustaining employment by reason of mental retardation or physical handicap and (b) chiefly dependent upon the Subscriber for support and maintenance, provided the proof of such incapacity and dependency is furnished to the Plan Administrator by the Subscriber within 31 days of the child's 25th birthday and annually thereafter, if required by the Plan Administrator. C. RECOMMENDED PLAN DOCUMENT LANGUAGE: . Attainment of the limiting age shall not terminate coverage of a child while the child is and continues to be both (a) incapable of self-sustaining employment by reason of mental retardation or physical handicap and (b) chiefly dependent upon the Subscriber for support and maintenance, provided the that proof of such incapacity and dependency is furnished to the Plan Administrator by the Subscriber within 31 days of the ehil 25th birthday a written request by the Plan Administrator and _ ___ �__ ____.tel annually thereafter if required by the Plan Administrator. 1\contra\mod.129 7