It's a fair question. After all, we pay rent, have a team of nearly 50 staff, advertise our products, operate a website, and act like a business in the way we go about managing our operations. Clearly, we have to generate revenue to cover these and other expenses.
The simple answer, of course, is that our money comes from members: like every business, the only funds we have are the funds our clients give us. We work hard to ensure that OMA Insurance is self-sufficient. OMA member fees are not used to subsidize the insurance operations; in fact, rather than operating as an expense to the OMA, the Insurance program has been able to contribute to the OMA budget for several years.
“ Rather than operating as an expense to the OMA, the Insurance program has been able to contribute to the OMA budget for several years.
The revenue needed to operate OMA Insurance comes from members primarily in the form of group policies and individual policies, as follows.
Group policies come in two forms: master policies with certificates, and individual policies written under a group contract.
Master policies with certificates (MPCs) are insurance policies that have a single "master policy" under which every individual is insured. Examples of master policies include OMA Group Life, Group Disability, Group Professional Overhead Expense (POE), and Group OMA Encore65 policies. The OMA Priority Insurance Program (OPIP) coverages also fall into this category.
MPCs may have many options, but all these options are defined within a single policy, and all members who buy that coverage share the same policy wording. Each member who buys coverage receives a certificate outlining the specific coverages they have selected so that they can clearly know what they have purchased, but the actual wording is defined in the policy, and it is the policy that defines what is covered or not. The certificate is a summary of the policy parts that are most often referred to. MPCs are "owned" by the OMA, and the certificate holders (members) are the insureds.
The advantage of MPCs is that they are less expensive to manage (e.g., managing one policy with 15,000 certificates is easier than managing 15,000 policies), they are easier to keep "modern" as new coverages are introduced and as the insurance industry creates better wordings, and they are easier to move if we ever need to switch insurance companies.
MPCs can also give the OMA a great deal of influence with the insurer. For example, an owner of a $15 million policy has more influence than an association that influences the 15,000 owners of $1,000 policies.
The disadvantage of MPCs, at least in theory, is that the owner could cancel the policy (in OMA group policies, the insurer cannot cancel the policies). So, essentially, the OMA— which was created and is controlled by physicians— could decide to cancel physicians' insurance (it is important to understand that the OMA has the right to cancel the policy, not certificates).
Some insurance competitors raise this as an issue of concern with prospective clients. Rest assured that the only reason OMA Insurance would ever cancel a policy is that either we have arranged a better deal for physicians elsewhere, or the current insurance provider has become financially unstable. In either case, it is a good thing to know we have the option to move to better or safer coverage elsewhere.
Individual policies written under a group contract (IPGCs) are different. In this situation, each member owns his or her own policy, and the OMA "group" agreement simply defines the type of coverages to be offered and the overall terms and conditions of those coverages.
These policies give the OMA less influence with the insurance company, but they do offer a greater ability to customize policies for each individual situation. This approach is best when there is a significant variation in the needs and situations of members. For example, our Group Home and Auto policies fall into this category, as the needs and assets to be insured under these policies vary widely. Our OMA Travel Insurance offering is also this type of group contract.
How OMA Insurance gets paid in both MPC and IPGC situations is the same: we receive a small fee— sometimes defined as an administration or marketing fee, sometimes described as a commission— based on the premiums paid for coverage. Currently, we average about 7% of premium as our overall compensation on these policies.
OMA Insurance does offer some truly "Individual" policies. Most of these are life, disability, or long-term care insurance policies for needs that fit outside of the scope of our group plans. Through our arrangement with HUB International insurance brokers, we also offer some home and auto products that fall outside of the regular OMA Group Home and Auto program.
All of these offerings exist so that we can more fully meet the needs of all members in all of your various situations. It is important to note that these individual offerings are not customized specifically for physicians, although they are designed to meet your specific needs to the extent possible within the product design.
OMA gets paid slightly differently for these policies. For the individual life and health policies, we act as a life insurance agent and get paid the standard commission that various insurers pay their agents. For the individual home and auto policies, we get paid a percentage of the commission, with the balance going to HUB International. In all cases, our staff are paid salaries and never receive a commission or any other payment directly related to the premiums you pay: their role is to serve your needs and offer advice without regard to which product pays what commission or compensation.
“ Our staff are paid salaries and never receive a commission... their role is to serve your needs and offer advice without regard to which product pays what commission or compensation.
The Physician Health Benefit Program (PHBP) is also worth mentioning. PHBP provides for an Ontario government subsidy to "eligible physicians" who are purchasing the health and critical illness offerings we make available as part of the larger OPIP offering. The program is actually administered by Ontario Physician Services Inc. (OPSI), a separate OMA subsidiary created specifically for the purpose of administering this government subsidy.
OPSI hires the OMA to manage the program, and the OMA collects a small fee (about 1.5%) for doing this administrative work. So, technically, a small portion of our money comes indirectly from this government-subsidized program rather than directly from members.
At OMA Insurance, our entire team works hard to deliver the best possible value to our members, and we are always aware that every nickel we spend comes from you. Members are both the cause we work for and the source of our livelihood. We do not take that responsibility lightly.
We know you work hard for your money. We know the solutions offered through OMA Insurance will help ensure you don't lose your way in life should something go wrong. We know you expect value for your money, and we strive to deliver the value you expect and deserve.