2009-2011
The period from 2009 has been one of great dynamism. The Board has concentrated on updating and expanding Benefits and processes, highlighted by Parliament’s passage of 22 amendments to the National Insurance Act, expanding employee opportunities and voice, increasing compliance in contributions and promoting wellness in the population with a number of innovative health-related programmes. Significant accomplishments are as follows:
· On September 2, 2009, Prime Minister the Right Honourable Hubert Ingraham, tabled in the House of Assembly the report of the 8th Actuarial Review of the National Insurance Fund (as of December 31, 2006). The immediate focus was on implementing the recommendations made by the Actuary, some of which were included in the 2005 Social Security Reform Commission Report that was also tabled in the House of Assembly in 2009.
As in previous actuarial reports, the overriding message of the 8th Review is that the National Insurance Fund is sound. It warns that the present contribution rate of 8.8% is not sufficient to sustain the current benefit promise indefinitely. It also advises that benefits paid by National Insurance will begin to lose relevance if insurable wages do not keep relative pace with actual income and if other changes are not made. Further, if these and other challenges are not addressed, it could mean a depletion of the National Insurance Fund by the period 2029 to 2035.
As for changes in the provisions of the National Insurance Act, 22 specific amendments were recommended and approved by the Minister responsible for National Insurance. Among the recommendations were:
o Increase the ceiling on insurable wages to $600 from the current $400 per week in two installments.
o Increase the number of contributions required to qualify for Retirement Benefit from 150 to 500 weeks.
o Change the method used to calculate Retirement/Invalidity Benefit to one that uses wages over the best 5 rather than 3 years, thus ensuring a better relationship between contributions made and pensions received.
o Change the wage ceiling for pensionable civil servants to that of all other contributors.
o Include in insurable wages gratuities and tips that are paid as part of regular wages for workers in the hospitality sector.
o Remove the limit on earnings for someone in receipt of Retirement Benefit
o Introduce triennial automatic indexation of pensions and grants with adjustments linked to price increases.
o Provide for the payment of both Retirement/Invalidity benefit and Survivors benefit where an insured may be otherwise entitled to both.
o Introduce a Survivors Grant equivalent to 1 year’s pension, payable to widowed spouses who do not qualify for a Survivors pension either because of their age or lack of dependents.
o For Sickness and Maternity benefit, require that the person must have been employed on the day of or prior to onset of illness and reduce the waiting days for Unemployment benefit to 3 days.
o Extend coverage for all benefits, except Unemployment Benefit, to all self-employed persons and adjust the contribution rate for all self-employed persons to 8.8%.
o Allow Invalidity Assistance to be payable from age 1.
o Establish stricter means test for Assistances
It should be noted that even before the 8th Review was tabled, NIB had started on making specific changes aimed at increasing revenue and controlling the growth of expenditure. These administrative initiatives and measures, of which a the Special Compliance Unit is one, are already addressing deficiencies, strategically positioning the Board for the future, and bringing about operational efficiency and value creation.
· The review by the Hay Group of the Job Evaluation and Compensation system, as implemented by the Board in 2004, was revisited for executives in May 2009, confirming that an executive strategic functional review would be required in the new term. It is important to note that the purpose of this exercise was to position NIB strategically for the future and ensure at the executive level initially, that NIB has the required talent and resources in order to guide business activities and successfully position NIB for the longer term.
· Objective based Performance Evaluations introduced to Executive Management Team and completed for calendar years 2009 and 2010.
· To advance the goal-setting efforts by Executives and Sr. Management, NIB also purchased a complete H.R. Management System (KRONOS) from the Armoury Company.
· The evaluation tool for Inspectors was implemented in January 2009.
· The Board made a significant change in consolidating Compliance and the Inspectorate under one Compliance Unit. A determination was made that this would bring sharper focus on compliance and consistent management across the area.
· The Strategic Operating Model Review, conducted by Ernst & Young in April 2009, will, when implemented, position NIB strategically for the future.
· Med 4, a key deliverable in the area of claims was introduced. Short term claims reduced by an average of 20% and net savings (fraud) estimated at $3 million.
· The Board successfully introduced Unemployment Benefit to its benefits package. NIB was recognized by the Office of the Prime Minister for its excellent performance in that regard. ($20.8 million was paid out in 2009 to unemployed Bahamians.). The Unemployment Benefit was made a permanent benefit in June 2010.
· The National Prescription Drug Plan was launched in September 2010 to make available prescription drugs used in the treatment of 11 chronic diseases gratis in the first instance to those participating in the first phase and at reduced cost subsequently.
· NIB’s signature “Healthy People” Programme, the second component of the National Prescription Drug Plan, was launched as “Get Well Bahamas” December 2010 with two central components. “Healthy People” aims to develop a culture of wellness in our population by partnering with qualified organizations to implement wellness activities in the community.
· In connection with “Healthy People”, NIB forged a partnership with Body Zone Fitness and Jemi Health and Wellness. This programme will benefit 40 Bahamians afflicted with one or more chronic disease in living a healthy lifestyle. Featuring a 3-month period of physical fitness and wellness counseling, the initiative is purposed to demonstrate that through lifestyle and behaviour change, chronic diseases can be managed and dependence on prescription medication can be reduced or even eliminated.
· A refocus on collections yielded $160 million in 2009 and $165million in 2010.
· The Board refocused on prosecuting delinquent employers– 1,200 cases in 2009 and 1,300 in 2010. For NIB Prosecution is a last resort when all attempts to negotiate have failed.
· For the first time, NIB assumed total control over investments by bringing the management of Investments in-house. This vital activity had previously been outsourced to investment firms
· The contribution rate was increased from 8.8% to 9.8% - first increase in NIB’s history – effective June 1, 2010.
· Construction started on several new Government Complexes– Freeport, Abaco, Sandilands Robert Smith Child and Adolescent Centre, Ministry of Tourism, Grand Cay Clinic, Inagua Clinic, and refurbishment of clinics in Nicholls Town, Kemps Bay, Mangrove Cay Andros.
· NIB’s website was redesigned to become a dynamic source of information and variety of resources, especially those related to processing claims.
· Launch of External Customer Survey – a continuous effort to gauge customer’s perception of our service delivery – this survey is completed monthly and feedback used to make further improvements in external customer service.
· Launch of Annual Internal Customer Survey – a tool for employees to advise management of progress made in living our vision.
· $30.039 million in Unemployment Benefit was approved as of January 4, 2010 to 19,738 Bahamians.
· Total benefits paid in 2010, excluding Unemployment Benefit, $162.5 million.
· January 2011 to see the launch of “Journey to Wellness”, a 7-episode reality TV series sponsored by NIB and produced by The Counsellors marketing firm, will follow the wellness journey of six persons participating in the 12-week Get Well Bahamas Health and Fitness Challenge. These six individuals (three men and three women) of varying age groups will represent the 11 chronic conditions supported by the National Prescription Drug Plan. It is planned that the series will run to April.
ADMINISTRATION & FINANCE
Portfolio responsibility for NIB during this period continued to be held by the Ministry of Finance, with the Honourable Hubert Ingraham, M.P., as Minister and the Honourable Zhivargo Laing as Minister of State. Patrick Ward was re-appointed Chairman of the National Insurance Board and Algernon Cargill continued as Director.
NIB’s Reserve Fund stood at 1.6 billion dollars at the end of 2009.