By Matt Kwong
RyeSAC is back with the health and dental broker that tried to sue them two years ago.
In a July 28 board meeting, RyeSAC voted to sign a five-year contract with Gallivan & Associates – the same company that threatened them with a lawsuit for breach of contract in 2002.
The new deal with Gallivan includes a unique performance bond, which will make sure that situation doesn’t happen again, according to RyeSAC General Manager Rob Emerson.
“It’s something I’ve never heard of with universities,” Emerson said of the performance bond. “It’s something we uniquely negotiated with [Gallivan]. I’m phenomenally excited.”
Because of the performance bond, students won’t be paying too much for their health and dental coverage. Gallivan ensures 85 per cent of premiums would be paid out as benefits to students.
If claims slip below that line, Gallivan promises to compensate for the shortfall up to $100,000. If claims are more than 85 per cent, it means students are getting the best value for their plan.
“It’s a win-win situation,” Emerson said.
In 2002, RyeSAC board members disagreed with the projection numbers put forward by Gallivan, some saying the figures looked too high.
After RyeSAC prematurely switched brokers to the Canadian Federation of Students-sponsored National Student Health Network, Gallivan sought legal action for breach of its five-year contract.
The suit was eventually settled on the condition that RyeSAC switch back to Gallivan and pay $35,000.
Emerson said board members now won’t have any reasons to dispute new claims because, “if those estimates are wrong, [the performance bond] would kick in.”The broker, then, is forced to be honest with the numbers it presents to RyeSAC.”
But Tom Rowlas, a co-ordinator with the National Student Health Network, took issue with RyeSAC signing a long-term contract.
“Being part of the Health Network, Ryerson has more control,” he said. “Signing a five-year contract is unusual; it is not an industry standard at all.”
The five-year Gallivan deal was made after RyeSAC repealed the old policy that limited the board to one-year contracts. RyeSAC Vice President Finance and Services Derek Isber commended the policy change.
“We signed a five-year deal in order to gain stability,” he said. “Also, we got a better rate.” But the motion to allow long-term contracts wasn’t unanimous. “I personally have great concerns with this,” board member Chris Drew said during the July 28 meeting.
Signing a five-year contract could be seen as “handcuffing” future boards with a long-term commitment, he said.
Last year, the outgoing RyeSAC team was accused of the same thing when they set policies at the end of their term.
According to Isber, that’s not an issue here. “People are saying this is handcuffing, but we’re going to live by this [contract] in our year. We’re not doing this just at the end of our term.”