Response to Letter to Editor in ARTA News and Views

The summer edition of News and Views had a letter to the editor expressing some concerns about ARTA's Benefits Plan. While ARTA apologizes for not providing a reply in the same edition, we will provide a response to that letter in the next News and Views. The letter from Mr. Roberts was well written and we are pleased that our members are using the "Letters to the Editor" section of News &Views to express their views on various issues. You may view this letter online by going to our website at www.albertarta.org and selecting "News and Views' on main menu. For now the following information is our reply.

Your Letter to the Editor of the ARTA News and Views raises some significant insurance concepts that are important to the participants in our ARTA Health and Wellness Benefits Plan, and which we are pleased to clarify.

• Our Health Benefits Plan is a "defined benefit" insurance program where, in aggregate, the premium will exceed claims in most years. In any one year, some individuals will have claims that exceed their own premiums, while other individuals will have claims that do not exceed their own premium. Our insurance plan is not a "defined contribution" plan like a health spending account (HSA), with set level of coverage and an objective to spend what premiums that are paid into the HSA account.
• Your specific calculations regarding prescription costs and travel premiums appear to be correct. However, under the Extended Health Care (EHC) benefit, prescription drug expenses represent only about 70% of total EHC paid claims. In your example, you have excluded any reference to potential paid claims coverage for non-prescription drug expenses which ARTA covers - 13 paramedical practitioners, vision care, hearing aids, hospital room and board, and other medical supplies and services. For example, if you and/or a spouse had used the full $600 annual paramedical benefit ($1,200 in total), or eye glasses, hearing aids, etc., you would have had access to coverage which exceeded your premium total.
• The ARTA Extended Health and Dental Plans are self-insured by ARTA. The premiums are used to pay claims, Johnson administration/claims expenses, ARTA expenses related to operating the plan, and establishment of required actuarial reserves. Any premiums not used for these expenses are returned to the ARTA Benefit Plan reserves. It is a cost-effective system - no insurance company profits and no stockholder dividends are extracted from the Plan. We do purchase stop-loss insurance from Desjardin Financial Services (DFS) which protects the plan against catastrophic expenses in the Extended Health Care Plan.

In several places in your letter, when you refer to health insurance, you refer to the "Johnson Plan" when you really mean the ARTA Benefit Plan. Johnson Inc. does not insure any of our benefits; ARTA self-insures these health and dental benefits. Johnson Inc. provides claims and administrative service to members and consulting and actuarial services to the ARTA Benefits Committee. You are correct that Johnson Inc. owns Morgex, but it is not true that Morgex can offer individual travel benefit plans that are more competitive than what ARTA offers with DFS. The individual travel plans that are offered by Morgex to anyone are sold on a "per trip" basis, and for most ARTA members they are more expensive than our annual multi-trip plan.

ARTA does not sell our Multi-trip travel insurance plan separate from our Extended Health Plan, because the two plans balance each other for rate stability. We could not negotiate as competitive a contract for travel benefits without placing our Extended Health, Dental and travel business as a combined offering with our provider Desjardins Financial Services. The 'package' that we insure with them gets us the best possible rates and contract terms. The ARTA Benefits Committee has expended considerable effort in configuring the coverage with a view to achieving the most competitive premiums and travel policy provisions.

On behalf of the ARTA Benefits Committee, we thank you for your interest in the ARTA Benefit Plan, and your insightful questions about ARTA's risk management model. Please call us if you would like further dialogue on this issue.

Ed Friss
Chair, ARTA Health and Wellness Benefits Committee

Anyone with questions about the health, dental or travel benefits coverage details in the ARTA Benefit Plan should call ARTA's administrator Johnson Inc. at 877-989-2600. Information on other ARTA member services including the Affinity Program and ARTA membership should call the ARTA office at 800-232-7208 ext. 474.. If you want to have any benefit concern considered by the ARTA Health and Wellness Benefits Committee, please direct further questions to Chairman Ed Friss at the ARTA office.