100 years of county unity
Pooling together in times of need

Finding reasonably priced and sustainable insurance coverage that could also meet the unique needs of North Carolina county governments was a challenge in the years leading up to 1980. By that year, the number of carriers for workers’ compensation coverage had dwindled and market conditions had deteriorated to the point that many counties found themselves in a crisis situation.

“The premiums just got so outrageous, and then they just said ‘we’re not going to insure you anymore,’” said John Ed Whitehurst, who was at the time Bertie County’s manager. “It happened to several of the managers across the state. [The rates] were just going sky high.”

As it does in so many situations, the Association stepped in and stepped up and gave counties a forum to create a workers’ compensation self-insurance pool that would meet county-specific needs. Almost 27 years after that first pool was created, the NCACC offers three risk management pools that provide value and exceptional service to members.

If you want something done right …

The Association’s Board of Directors first took up the workers’ compensation issue at its October 1980 meeting, appointing a five-member advisory committee and authorizing funds to hire a consultant to study the feasibility of setting up a self-insurance fund. A number of county associations across the nation had already begun such ventures, resulting in substantial cost savings for counties. “It may be possible to save … hundreds of thousands of dollars in workers’ compensation premiums through a group self-insurance program,” former NCACC Executive Director Ron Aycock said at the time.

And save they did. The 59 counties and three entities that had enrolled for workers’ comp coverage at the close of the 1981-82 fiscal year realized a return of premium payments – or dividend – of $726,455 (roughly 44 percent).

A Board of Trustees of county officials was set up to oversee the “NCACC Joint Risk Management Agency,” and the program’s administrator also began working with counties to develop and improve their safety programs.

Counties quickly went from not being able to find workers’ comp coverage to having ownership over a stable program specifically designed to meet their needs. They received a dividend payment to boot.

Déjà vu for liability and property coverage

It wasn’t long before the same scenario played itself out in the liability and property market. When the Board of Directors began considering starting a liability pool in October 1985, one county told of having to pay 50 times as much over its previous year premium in order to renew coverage, and several others told of being forced to pay five or 10 times as much.

The Association’s Liability and Property Pool came into operation in time for the 1986-87 fiscal year. The program’s 10 initial county members lauded the many advantages of the program, such as:

• Any interest earned by premiums being held in reserve for claims would be returned to the county pool;
• By virtue of having their own program, counties would enjoy more stability by not being subjected to the on-going instability of the private insurance market;
• Drastic lawsuit settlements paid by local governments in other states, such as California, would not be considered in the rating of a North Carolina program; and
• The pool would tailor a loss control program for county exposures to help reduce claims.

“This is the type of program that should grow steadily as it proves to be a sound alternative for counties,” then NCACC President Virginia Oliver of Cumberland County said at the time. Oliver’s words have borne true, as the pool counted 116 members in March 2008.

Another unhealthy market for counties

Rapidly escalating healthcare costs during the 1980s and early 1990s left boards of county commissioners and county managers with difficult budgetary choices: decreasing employer-paid contributions for employee medical coverage, reducing employee benefits, or both.

In 1991, the NCACC set up a County Care health benefits program, an endorsed product that provided counties with a variety of plan and funding options. That led in 1995 to the creation of a Health Insurance Trust, which was later titled the Group Benefits Pool, then changed to the County Health Plan in 2006.

Like the Association’s Workers’ Compensation and Liability and Property pools, the County Health Plan is a not-for-profit operation – that is, any “profits” become members’ equity. That equity in turn is used to stabilize the pool and future contributions or returned to members if it is more than needed.

All three pools are governed by members via the Risk Management Pools Board of Trustees. The pools have added a great number of benefits and services over the years, all designed with county needs in mind. Some of those benefits include:

• Helping member personnel identify when and how losses occur, and how much they cost, and providing members with an action plan and specific recommendations to correct the problem;
• Providing a dedicated health education coordinator to assist in designing an employee wellness program that focuses on specific member needs;
• Providing quarterly detail claims loss and payment reports for members of the Liability and Property and Workers’ Compensation pools and annual, quarterly and monthly group claims activity reports for County Health Plan participants;
• Offering a grant program designed to provide startup funds for members to implement new employee wellness programs;
• Providing COBRA administration services;
• Providing 100 percent coverage for certain preventative care benefits (no out-of-pocket expenses for member group employees or covered dependents) at in-network providers;
• Offering a multi-pool discount for members participating in two or three pools; and
• Providing personalized support and a wide selection of disease management program tools for participants to manage chronic conditions such as asthma, chronic obstructive pulmonary disease (COPD), diabetes, heart disease and low back pain, to name a few.

Benefits such as these wouldn’t be offered through other programs, or would only be offered for an additional fee. For members of the NCACC Risk Management Pools, these services are par for the course. That’s the value of being a member-driven organization.

– Jason King and Donna Walker contributed to this report.