[Okgrantsmanship] Questions about unemployment and self-insurance

Mason, Linda lmason at osrhe.edu
Thu May 25 16:02:40 CDT 2017


Yolanda, you can send this out using the list serve. It is Oklahoma Regional Sponsored Programs Directors (okgrantsmanship at lists.onenet.net<mailto:okgrantsmanship at lists.onenet.net>), and Tony Wohlers is still the list serve administrator. You probably want to be the administrator yourself. It involves reading the message that someone wanted to post (mostly you as CGR or me as Regents) and approving its distribution to the list. All the members of CGR and grant staff for all the higher education institutions are on the list.

Dr. Linda Mason
Coordinator of Grant Writing
Oklahoma State Regents for Higher Education
655 Research Parkway, Suite 200
Oklahoma City, OK 73104
405-225-9486 desk
405-706-8757 cell
405-225-9230 FAX
lmason at osrhe.edu<mailto:lmason at osrhe.edu>
www.okhighered.org/grant-opps/<http://www.okhighered.org/grant-opps/>


From: Carr, Yolanda [mailto:yolanda.carr at swosu.edu]
Sent: Thursday, May 25, 2017 1:12 PM
To: 'Lyon, Leah P.'
Cc: Mason, Linda
Subject: RE: Questions about unemployment and self-insurance

Leah,

If you don't mind, I have copied Dr. Mason on this email. She may be able to assist you in getting a response regarding your questions below. I believe her email list contains more individuals.

Linda, can you assist us with the two questions listed below?

Thanks.

From: Lyon, Leah P. [mailto:llyon at ecok.edu]
Sent: Thursday, May 25, 2017 10:03 AM
To: Carr, Yolanda <yolanda.carr at swosu.edu<mailto:yolanda.carr at swosu.edu>>
Subject: FW: Questions about unemployment and self-insurance
Importance: High

Yolanda,

Beverly sent this out a while back but I didn't get any response.  Could you please send out these two questions again?

Thanks!


Can you send this question out to our CGR group for any answers or input?

1) If your university is self-insured for unemployment benefits, how do you handle paying claims on grant/externally funded staff?
2) Does anyone have a "reserve" as mentioned in the highlighted section below?  If yes, how do you handle it?  Can you share a policy or procedure with me?


Below are two excerpts related to such reserves/options.

Thank you for anything you can share.


Leah Lyon, Director
Office of Sponsored Programs and Research
East Central University
Ada, OK  74820
580-559-5259
llyon at ecok.edu<mailto:llyon at ecok.edu>







Uniform Guidance on Self-Insurance and Unemployment


§ 200.431 Compensation-fringe benefits.

(1) Provisions for a reserve under a self-insurance program for unemployment compensation or workers' compensation are allowable to the extent that the provisions represent reasonable estimates of the liabilities for such compensation, and the types of  coverage, extent of coverage, and rates and premiums would have been allowable had insurance been purchased to cover the risks. However, provisions for self-insured liabilities which do not become payable for more than one year after the provision is  made must not exceed the present value of the liability.

(2) Costs of insurance on the lives of trustees, officers, or other employees holding positions of similar responsibility are allowable only to the extent that the insurance represents additional compensation. The costs of such insurance when the non-Federal entity is named as beneficiary are unallowable.

(3) Actual claims paid to or on behalf of employees or former employees for workers' compensation, unemployment compensation, severance pay, and similar employee benefits (e.g., postretirement health benefits), are allowable in the year of payment provided that the non-Federal entity follows a consistent costing policy and they are allocated as indirect costs.



§ 200.447 Insurance and indemnification.

(d) Contributions to a reserve for  certain self-insurance programs  including workers' compensation,  unemployment compensation, and severance pay are allowable subject to  the following provisions:

(1) The type of coverage and the  extent of coverage and the rates and  premiums would have been allowed  had insurance (including reinsurance)  been purchased to cover the risks.  However, provision for known or  reasonably estimated self-insured  liabilities, which do not become payable  for more than one year after the  provision is made, must not exceed the  discounted present value of the liability.  The rate used for discounting the  liability must be determined by giving  consideration to such factors as the non-  Federal entity's settlement rate for those  liabilities and its investment rate of  return.

(2) Earnings or investment income on  reserves must be credited to those  reserves.

(3)(i) Contributions to reserves must  be based on sound actuarial principles  using historical experience and  reasonable assumptions. Reserve levels  must be analyzed and updated at least  biennially for each major risk being  insured and take into account any  reinsurance, coinsurance, etc. Reserve  levels related to employee-related  coverages will normally be limited to  the value of claims:
(A) Submitted and adjudicated but  not paid;
(B) Submitted but not adjudicated;  and
(C) Incurred but not submitted.

(ii) Reserve levels in excess of the  amounts based on the above must be  identified and justified in the cost  allocation plan or indirect cost rate  proposal.

(4) Accounting records, actuarial  studies, and cost allocations (or billings)  must recognize any significant  differences due to types of insured risk  and losses generated by the various  insured activities or agencies of the non-  Federal entity. If individual  departments or agencies of the non-  Federal entity experience significantly  different levels of claims for a particular  risk, those differences are to be  recognized by the use of separate  allocations or other techniques resulting  in an equitable allocation.

(5) Whenever funds are transferred  from a self-insurance reserve to other  accounts (e.g., general fund or  unrestricted account), refunds must be  made to the Federal government for its  share of funds transferred, including  earned or imputed interest from the date  of transfer and debt interest, if  applicable, chargeable in accordance  with applicable Federal cognizant  agency for indirect cost, claims  collection regulations.

(e) Insurance refunds must be credited against insurance costs in the year the refund is received.
(f) Indemnification includes securing the non-Federal entity against liabilities to third persons and other losses not compensated by insurance or otherwise. The Federal government is obligated to indemnify the non-Federal entity only to the extent expressly provided for in the Federal award, except as provided in paragraph (c) of this section.


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