By Eric Lam
Ryerson students will be paying $35 more for their health and dental coverage this year for exactly the same plan.
Since the Ryerson Students’ Union switched insurance providers to Manulife, students will be paying $295 this year, about $100 more than other GTA universities.
However, there’s nothing the RSU can do about the rising costs because they’re locked in a five-year deal with insurance broker Gallivan and Associates, signed by the union in summer 2004.
In fact, Gallivan will make $170,000 in commissions this year, and $850,000 over the life of the deal. This works out to $17 a student each year in the plan.
“This was the best rate we could negotiate in 2007,” said Chris Drew, VP Finance for the RSU.
Students have seen their health and dental plan payments go up $85 in the last two years for essentially the same coverage, from $210 in 2005.
According to Drew, there are two major factors in determining student premiums: usage and broker fees.
About 45 per cent of students opt out of the plan each year. It also means the students are less likely to use their plans, which bumps up premiums, said Mike Verticchio, executive director of the RSU.
The RSU went with Manulife because of a “two-year price guarantee” other providers, including Great-West Life, refused to match.
“The executive committee voted Manulife had a better price for what we thought was reasonable for students.
“Reasonable is relative,” Drew added.
The offer from Great-West Life was either “slightly above or slightly below” Manulife’s, Drew said, and Gallivan also came up with “very similar” offers from multiple providers.
“The purpose of a broker is to be aggressive to get the best deal from an insurance company.
“If you’re unsatisfied you can switch.”
Drew refused to say he was dissatisfied with Gallivan, but he emphasized he voted against the contract and pointed out the RSU has passed a policy preventing executives from signing multi-year contracts in the future.
However, even getting out of the contract early would be dicey.
“The last time we [broke the contract] we were taken to court,” said Verticchio.
In 2002, the RSU settled out of court for $35,000 with Gallivan after jumping to Green Shield Canada for a cheaper rate.
A look at the marketplace shows there are lots of other brokers in the sea.
At the University of Toronto’s Scarborough campus, students pay $172 and get vision care, something the RSU’s plan lacks.
Over at Concordia University, students also get vision care with their plans for $195.
But comparing plans between universities is like comparing “apples to oranges,” said Verticchio.
Switching brokers would garner minimal savings, likely offset by increased legal fees.
Representatives from Great-West Life were mum on being dropped by Ryerson, refusing to speculate.
Meanwhile, Christian Chan, a third-year urban planning student, paid almost $900 in glasses in the past month, none of it covered by the health plan.
“The things that they do cover are kind of ridiculous compared to what they don’t,” Chan said.
And when Chan approached RSU president Nora Loreto, she said it was impossible to get that kind of coverage unless they “jacked up tuition fees by $300.”
Chan said he would rather pay $300 more for the plan than $900 for glasses.
“Additional coverage would cost more. The other option is to cut back on certain items…we felt at this point it would not be in the best interest of students,” Drew said.
He also expects other companies to propose much higher prices next year, making the guarantee attractive.
However, because those contracts are negotiated yearly, whether the RSU will be sticking with Manulife is a decision for “next year’s executive.”