Pooled insurance arrangements through joint powers authorities (JPAs) or other group purchasing structures have benefitted public agencies for many years now. Your organization may have realized some of the advantages from participating, including cost savings and availability of ancillary services like loss control.
These pooled programs may be a great for your charter school if the coverage and services actually fit well with your needs and risk exposures. But if a standardized, one-size-fits-most, insurance package leaves you with gaps in your coverage or services you can’t really use, it may be time to consider how a customized risk management or employee benefits plan could save you money while tailoring the program to your situation.
When you look at withdrawing from a JPA or other pool insurance program, it’s important to weigh the pros and cons. You need to go into the process with open eyes and be fully aware of the procedures and timelines. The requirements and deadlines for withdrawal are typically spelled out in the by-laws of the JPA. As you look at your alternatives, keep your options open by staying on top of withdrawal deadlines.
"Keep your options open by staying on top of withdrawal deadlines."
JPAs usually have a provision for a Preliminary Notice of Withdrawal which member districts may exercise by submitting a Preliminary Notice of Withdrawal Letter (PNOWL) by a certain date prior to the next plan year. The PNOWL deadline is around 4-6 months before the plan anniversary date. Submitting a PNOWL does not obligate you to exit the JPA program, but preserves your ability to leave for the following plan year should you find a more satisfactory arrangement.
Another consideration is whether there is an exclusionary period if you do withdraw from the JPA. Some programs will not allow an agency to become a member of that JPA again within a certain number of years following their withdrawal. Therefore, you need to think about the terms of any alternative customized program and the potential rate increases over time.
You should be able to answer many questions during the preliminary notice period in order to make a good decision for your charter school. From total cost of risk to financial protection from your specific exposures, a consultant can assist you in evaluating whether exiting a packaged program for a custom benefits or risk management program will be to your advantage.
