Sherburne County is trying to save taxpayer dollars by cutting down on insurance claims.

 

Last week, Jane Hennagir, account executive with the MN Counties Intergovernmental Trust (MCIT), gave the county board an update on the previous year’s claims and dividends.

 

MCIT is a joint powers entity made up of counties and associated entities that pool their resources to provide casualty, property and workers compensation coverage to employees.

 

Hennagir said over the last few years, Sherburne County has had a  record of low workers compensation claims.

 

Under MCIT, workers compensation claims are the only type of claim that affects the county’s rates.

 

“Counties that have more workers compensation claims pay more for their coverage than counties that don’t,” said Hennagir.

 

For each dollar of contribution that is collected, MCIT’s actuary expects to pay out a certain amount in losses. Those losses are based on the experience of the trust. Using those loss statistics, a base cost is established as a benchmark for each trust member.

 

“If your losses come in higher than expected, you pay more than the base cost of coverage,” said Hennagir. “If they come in less, you pay less than the base.”

 

In 2011, the base cost was $560,065. But because of a less than expected number and severity of claims, about 72% of the expected amount, the county paid just $403,807.

 

“That’s probably one of the lowest I’ve seen,” said Hennagir. “That resulted in $156,000 in cost savings.”

 

The county also had cost savings of $39,744 in 2012, $43,025 in 2013 and $22,815 in 2014.

 

In 2015, the county paid $61,520 above the base cost due to a few large compensation claims.

 

Hennagir said that can happen sometimes, but MCIT has ways to help counties manage their risk and lower the number of claims. Some programs they offer include defensive driver training, peace officer accredited training, resilience training and the employee assistance program (EAP) which provides professional counselors for support and advice on personal issues.

 

“There’s a direct correlation between employee personal issues and claims,” said Hennagir. “Accidents are more likely to happen.”

 

MCIT also has a benefit for its participating members - dividends.

 

“Probably the most visible benefit of being a member of a self-funded pool is the dividends,” said Hennagir. “Dividends are the result of lower than expected losses and investment income.”

 

Since 1991, MCIT has paid out over $290 million in dividends to its members.

 

“If you were with a standard stock insurance company, those dollars would go back to stockholders in the form of company profits,” said Hennagir. “Our only source of funding is taxpayer dollars, so when we have the benefit of investment income those dollars come back here to Sherburne County and the taxpayers.”

 

Sherburne County received $275,420 last year and has received over $2.3 million in dividends over the past five years.

 

“That’s significant and it’s due to the loyalty of our members,” said Hennagir.   “It’s important that everyone controls losses. Everyone is in it together.”