The health and dental insurance plan administered by SAC has received a last-minute overhaul just in time for the new academic year. Last week the executive voted to fire its longtime insurance broker, Cherian & Company, and sign a new contract with a new broker and a new insurance provider. Although the abrupt switch may result in a multimillion dollar lawsuit from Cherian & Company, SAC executives say the benefits of the switch far outweigh the potential costs.
“It’s totally worth it,” said Alexandra Artful-Dodger, vice-president of operations at SAC. “The savings will be about $1 million this year. All the legal bills of a full-blown lawsuit and all the damages that could theoretically be awarded are still less than half the savings we make.”
President Ashley Morton added that the plan includes several improvements: “As compared to last year, our pharmaceutical coverage has bumped up to 100 per cent from 80 per cent. The plan will now cover birth control, and dental coverage is up to 80 per cent,” he said.
The SAC board of directors voted on August 24 to sign a one-year contract with StudentCare Networks, an insurance broker that specializes in universities and colleges. The board also decided several days later to change its insurance provider, from Maritime Life (which recently bought Liberty Health, the former provider) to SunLife.
All full-time undergraduates have already been billed $199 for health and dental insurance because tuition and student fee invoices were sent out before the decision to change plans was made. But since the new plan is roughly $50 cheaper per student under the new SunLife policy, Artful-Dodger and Morton say that students may receive a refund cheque sometime this fall. They added that the actual amount of that refund is still unknown.
The refund may hinge on a lawsuit which could be filed soon against SAC by their former insurance broker, Cherian & Company. The brokerage signed a contract with SAC last spring, an agreement which would have seen Cherian continue as SAC’s broker through 2009. By terminating that contract only a few months after it was signed, SAC may be the target of a lawsuit from their former broker.
“We feel they’re not justified in terminating the contract,” said Geoff Freeman, president of Cherian & Company. “We’re meeting with our lawyers next Tuesday, Wednesday and Thursday to discuss our options.”
Morton said he felt SAC had a strong case for ending the contract.
“We are in a situation now that we are satisfied that what we did was appropriate and legal. If he [Freeman] wants to sue us, he can do so, but for the moment we’re happy with things as they are. We educated ourselves to a much greater degree and came to the conclusion that it was acceptable to terminate the contract.”
The previous contract with Cherian is the object of some controversy; it was signed by Rocco Kusi-Achampong and John Lea, then the president and vp operations at SAC, respectively. Artful-Dodger says that they did so without the approval of the board of the directors or the SAC executive.
“It was signed in a shady way,” Artful-Dodger said. “we found it problematic that the contract was back-dated by two months.” While the date of the contract is written as February, Kusi-Achampong and Lea actually signed it more than two months later.
Morton says that the former President and Vice President signed “almost certainly in April.”
“They broke our bylaws,” said Artful Dodger. “They signed dozens of contracts…without the knowledge of the board.”
“They kind of went on a contract-signing rampage,” she added.
“I can’t actually remember when it [the contract] was dated,” said Lea, but said that he and Kusi-Achampong did not backdate the contract. “I don’t think that’s true at all,” he said. “We signed the contract because it was viewed as a routine thing.”
Kusi-Achampong was unavailable for comment.
Freeman says SAC’s internal affairs are no concern of his: “I don’t knowÑwas I supposed to know anything about that?” he said. “From my perspective it [the contract] was signed in good faith….From our point of view we signed with authorized members of the corporation.”
Morton and Artful-Dodger say that they are already working with the new broker and insurer to make a smooth transition to the new service. The awareness campaign will include emails, advertisements in campus publications, mailings, and fliers in frosh-week kits. There will also be a 1-800 number to answer students’ questions.
The SAC Board voted 19-1 in favour of the new plan from StudentCare Networks, with 2 abstentions.
Morton said that the overwhelming vote indicated that “the board was very satisfied” with the broker’s proposal, while Artful-Dodger described the vote as “a rare moment of consensus.”
