COVID-19 Insurance for College Athletic Programs: Will Your School Buy In?

Photo Credit: The Tenneseean

On October 23, ESPN reported that a prominent insurance broker is rolling out a policy which would provide coverage to college athletic departments if their student-athletes are hospitalized due to COVID-19. The policy is only available to NCAA-member schools (meaning junior colleges and NAIA schools are excluded) and they have until November 20 to enroll. The insurance has the potential to cover around 450,000 student-athletes at more than 1,200 NCAA schools, however, at this stage in the game, it is impossible to predict how many schools will purchase the policy.

Alex Fairly, a prominent insurance broker whose clients include the NFL and MLB, was the broker who put together the deal. He was initially negotiating with a Berkshire Hathaway subsidiary and things looked promising. Fairly had hoped to launch the policy before the college football season began, however, twelve hours before the program was to go live, the Berkshire Hathaway subsidiary backed out after concerns arose regarding compliance and “reputational risks.”

Eventually, Fairly found another insurer, Berkley Accident & Health, which is a part of the commercial insurance giant W.R. Berkley Corp. The company has some experience with sports insurance, as another subsidiary of W.R. Berkley provides workers’ compensation insurance for NFL teams. Like many others during the pandemic, the company recognized the importance of sports and wanted to help colleges mitigate the risk to help decide how to get student-athletes back playing safely. Fairly Group, Fairly’s risk-consulting firm, also partnered with OccuNet, which designs client-specific workflows and solutions, and A-G Administrators to create and administer the program.

Fairly said that NCAA member schools will have two options of insurance for their student-athletes. For $65 per student-athlete, the school can purchase coverage for individual COVID-19 related medical expenses up to $150,000. Alternatively, the school can pay $85 per student-athlete and the coverage increases to $250,000. The policy carries a $5,000 deductible and also includes a $10,000 death benefit. According to ESPN, for Division I schools supporting an average of 500 athletes, the total cost of the insurance would be at least $32,5000.

Athletic directors across the country, in all three divisions, are reviewing and evaluating the policy. While it’s predicted that the policy would be purchased primarily by Division II and Division III schools (as they are probably less able to afford the potential costs of an athlete getting very sick from the virus), the intent for all is to provide the greatest standard of care and appropriate levels of coverage to all of their student-athletes.

But not everyone is on board with this. The pandemic has created a new revenue stream for insurance companies and they have concluded that they can profit off the pandemic. With student-athletes, the insurer profits by taking in more money in premiums than they will end up paying out in claims for sick student-athletes. Dr. Preeti Malani, chief health officer at the University of Michigan and a professor specializing in infectious diseases, thinks that offering this type of insurance for student-athletes “just feels wrong.”

Essentially, the insurers are placing a value on student-athletes lives by saying “[i]f you get sick or you die, this is how much we think you’re worth.” Dr. Malani analogized this coverage to insurance people used to buy before flying in fear that the plane might go down. She said that if people feel they need this type of insurance “it’s like [they’re] saying that the safeguards [they] have in place might not be good enough.”

While this may be true, this view seems very narrow. Prior to this policy, schools were relying on a combination of their own insurance and the student-athletes’ or parents’ personal insurance coverage, to cover sports related injuries. However, many student athletes do not have insurance, and the school’s existing athletic policies do not cover COVID-19. Now, the NCAA requires schools and conferences to meet specific requirements if they are conducting athletic activities during the academic year — one of which means covering COVID-19 related medical expenses for student-athletes.

The NCAA has subsequently clarified this requirement by necessitating divisions only to develop rules providing that member schools will cover COVID-19 related health costs. But this is still an enormous risk for smaller schools hoping to have athletic seasons, whether that’s practice and/or competition. As mentioned above, smaller DI schools, DII and DIII schools may not be able to afford the costs of an athlete getting very sick from the virus. The COVID-19 student-athlete insurance option gives them a little relief.

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