I had an interesting discussion yesterday with a person who is in the know regarding the MSA industry, and they told me of a pretty unique concept about to be launched. I have it on good authority that one of the larger MSP Compliance firms will be rolling out an available insurance component for MSA's within the next couple weeks. Payers will be able to purchase an underwritten policy that effectively insures the risk of MSA compliance.
This really becomes a "duty to defend" policy, in as much as the insurance company would assume responsibility of defending an MSA against any additional future contributions the government may attempt to collect. If it is found that the MSA was not indeed adequate, they would then pay the resulting assessments.
These policies would be underwritten by an established specialty lines company.
While this appears to be a radically new concept, it is probably a natural evolution in the world of risk management, transfer and avoidance. The ever changing MSA space has continued to be a source of pain and contention for employers and their representatives, and the concept of insuring that activity could represent a final resolution for a problem that seemingly won't go away.
I have been an advocate of professional administration for MSA's, and I asked my contact how this new option could impact that segment of the industry. Interestingly, it appears the two concepts could work in unison. The forte of professional administration is to insure the MSA funds are properly distributed, protecting both the claimant from potential Medicare denials and the employer from future collection attempts resulting from a government looking to stem its losses. The MSA insurance concept would protect the employer from the setup of the MSA itself, should unforeseen events result in the determination by the government that it was not adequately funded to begin with. Used in unison, it would seem the two practices could lower the individual costs of each, since mutually beneficial protections would be in place.
It will be yet another option for employers in the slowly maturing world of the MSA.
So, look for something new and interesting in the MSA segment over the next few days. It will be interesting to see the impact both within the employer market and from competitive response.
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