By Adam D. Schmaelzle, Esq.
If you have ever been involved in the sport of Rugby in America, you are probably familiar with the term “Getting CIPP’ed”. That is because USA Rugby, the governing body for the sport of rugby in the United States, requires anyone involved in the sport, such as coaches, admin, referees and all players to be “CIPP’ed” before their first game. But many players are so eager to get on the pitch that they pay their dues without fully understanding what getting “CIPP’ed” actually is. I figured I would take the time to write a brief article explaining the process, and what it means to a rugger.
“CIPP” stands for Club and Individual Participation Program. This program automatically enrolls a player, coach, ref…… into two separate insurance programs. One is a liability insurance program, and the other is an accident insurance program.
As far as the liability insurance program goes, a player should understand that this policy is not actually an individualized policy that is taken out solely for the benefit of limiting a player’s liability in the event of ordinary negligence. The sole beneficiary of this policy would be USA Rugby, who is the named insured under Zurich America Insurance Company. As with most organizations, which have a large number of affiliates, Zurich further insures all of USA Rugby’s Territorial Unions, Local Area Unions, USA Rugby registered clubs and registered members, coaches, referees, volunteers, committee members and administrators. As a “member” of this policy, you are basically covered if you accidentally run into a spectator or a piece of property on the field and one of them becomes broken in some way. If you run out into the crowd and punch a drunken screaming spectator in the face, that would be considered “gross negligence” and you would not be covered under the policy. If anyone on the team decided to vandalize a field or a piece property, that too would not be covered under the policy. Essentially, the policy covers you if you hurt someone else while playing rugby, as long as it is not another player, which is probably the most important piece of information about this policy for players. IT DOES NOT COVER PLAYER ON PLAYER INJURIES!!!
So why is it necessary? Well first and foremost, the majority of fields and facilities require a team to have liability insurance before allowing an event to take place at that facility. This policy would generally meet that criteria and give a club the opportunity to play in certain tournaments or on certain fields. The second answer requires an understanding of liability litigation, which I would be happy to explain to anyone who is interested in it, but essentially, if an individual or entity suffers some type of injury or loss, they would typically try and recover from the person with the most amount of money. A facility is likely to have more money than an individual player, and therefore would probably be on the defensive side of any lawsuit. If a team is affiliated with an organization (i.e. USA Rugby), they too can be named as a party to a lawsuit, and therefore everyone requires liability insurance to protect themselves. Confusing, but sensible. To add to all this confusion, each player should be aware that although their dues add them to a list of covered individuals under Zurich’s liability policy, there are still waivers of liability that must be signed as a requirement of CIPP. I have included a link at the bottom of this article with all of the legal language regarding liability waivers, but in any case, here is the gist of it:
“THE UNDERSIGNED WILL INDEMNIFY, SAVE AND HOLD HARMLESS EACH OF THE RELEASEES FROM ANY LIABILITY, LITIGATION EXPENSES, ATTORNEY FEES, LOSSES, DAMAGES OR COSTS ANY MAY INCUR AS THE RESULT OF ANY SUCH CLAIM, WHETHER ASSERTED BY THE UNDERSIGNED, THE PARTICIPANT, OR ANOTHER PERSON. _______INITIAL HERE”
The second policy is where many players take issue, the accident insurance policy. This policy covers those who are CIPP’ed for injuries sustained during a USA Rugby sanctioned event. This includes games, traveling and practices (as long as that individual is CIPP’ed at the time of the injury and his/her team is in full compliance with dues, registered coach and sufficient players). As with USA Rugby’s liability insurance program, there is only one accident insurance carrier. Nationwide Life Insurance Company. The underwriter is K&K Insurance Group. The purpose of this policy is to provide SECONDARY insurance to those who are covered if they become accidentally injured as a result of a rugby-related activity.
These insurance policies has been criticized for many reasons, most recently because (1) It is a requirement to play rugby, and (2) because many of the players on the field in 2014 are subject to the affordable healthcare act, and are therefore required to have their own insurance policy. Prior to 2014, other players criticized this requirement because many of their employers provided an insurance policy that would fully cover them in the event of an injury on the pitch, which would make a secondary insurance policy seemingly redundant. Those players would argue that it is unreasonable to pay dues for an insurance policy they would never need or use. Nevertheless, I’m going to break it down like this:
The accidental insurance policy has two-potential deductibles, a $1,500 deductible if you already have insurance, or a $3,500 deductible if you have no insurance. Why is it more expensive if you don’t have insurance? Because this policy is merely a secondary insurance policy. Its purpose is really to cover any additional medical expenses that your primary insurance provider will not cover. So if you have no insurance, you’re not only getting fined by the affordable health care act, but you are putting Nationwide primarily on the hook for your rugby-related injury, and they don’t like that.
There are MANY exclusions to the benefits including pre-existing conditions, infection and alcohol related injuries. Check out the link below
What if your primary insurance policy has a $1,600 deductible, and you want to save $100 by going with the insurance company your dues paid for? You can’t. This policy is merely a supplement to a primary insurance policy. You will have to file your claim there first.
Interesting, mildly off-topic tidbit of information; if you are an individual who is still covered under his/her parents health insurance policy, and your parents are separated (and therefore have two separate insurance policy’s which cover you), your father’s insurance policy will act as your primary policy and your mother’s will be secondary, regardless of whether one insurance policy is better than the other, and regardless of which parent you may live with.
Ever wonder what your limbs are worth? Under Nationwide’s policy, your scheduled benefits go as follows:
- Coverage will pay $7,500 for the accidental loss of life and scheduled benefits for dismemberment as indicated below. The loss must occur within one year of the date of the accident.
- Both hands or both feet: $7,500
- One hand and one foot: $7,500
- One hand or foot, plus sight of one eye: $7,500
- Sight of both eyes: $7,500
- Speech and hearing: $7,500
- Quadriplegia: $7,500
- Paraplegia: $5,625
- Hemiplegia: $3,750
- Speech or hearing: $3,750
- One hand, one foot; or sight of one eye: $3,750
- Thumb and index finger of the same hand: $1,875
So here’s the big question…. Is it worth it? Well, if you have no insurance, it probably is as long as you have injuries that will cost you more than $3,500, and you have that much to cough up before any medical work is done. What if you do have insurance? If your primary insurance company is not willing to pay the full amount, and the amount they are not willing to cover is more than $1,500, then definitely. This policy is sort of like an insurance policy for your insurance policy. “Nationwide will supplement the unpaid remaining allowable charges/co-insurance by paying 80% up to the policy limit.”
What if you have insurance, and it will cover every dime of any injury? I guess at that point, it depends how you feel about it. According to a recent study conducted by the Department of Health and Human Services, The national average for the second-lowest cost silver health insurance plan premium rate is $226 per month for a 27-year-old, ranging between a low of $127 to a high of $406. The yearly dues for CIPP are approximately between $25-$100 to be enrolled in both insurance programs, and maintain enrollment with the USA Rugby organization. Nevertheless, for this individual it would seem to be an unnecessary added expense.
In 2013, Nigel Melville, the CEO of USA Rugby addressed the issue with a letter to the members of USA rugby concerning the increase of dues. The letter read as follows:
As USA Rugby reviews the renewal of the member accident policy, it is once again faced with increased premiums based upon the claims paid out to date. Claims for year one with Zurich are estimated at over $4,000,000 while claims in year two with Nationwide are currently estimated to reach $750,000. The result is a proposed 5% increase in the policy premium which would now put the premiums in excess of the $10 dues increase that was approved 2 years ago.
Next week the USA Rugby Board will be discussing this issue and I believe that presenting feedback from Congress at the meeting should be an important part of the process. I would therefore like you to provide me with feedback on the options below.
Option 1 – USA Rugby drops the member accident policy altogether and reduces member dues by $10 for Senior, College, HS and Youth, Coach, Ref and Admins. No reduction on Rookie Rugby, Eagle Supporters Club or Club Fee categories as those were not increased at the inception of the policy. The impact on the USAR budget would be flat, and the membership waiver would, again, require that all members carry medical coverage in order to play.
Option 2 – USA Rugby implements deductible increases on the current policy. While there have been a variety of options proposed, we would likely consider no increase for members with primary insurance and a $500 increase for members without primary insurance. This would be the only change to the policy for the 2013/2014 year and would result in $1500 ded for members with primary medical and $3500 for members without primary medical.
Option 3 – USA Rugby can increase the membership rates, approx $10, and continue to provide the policy that would decrease deductibles to levels similar to year one, $1000/$2500 and would eliminate the 80/20 coinsurance provision ($1000 deductible would not be disappearing). We would have to get firmer pricing so this is not a guarantee. The plan would not be identical to year one, and we cannot guarantee we could sustain this in the long term. If we improve benefits then the claims will go up significantly, which means future premium increases. In the short term $5 per member would suffice but in the long term, a $10 increase may be necessary to continue the policy.
You may have an option 4 that we have not considered at this point, please do not share any alternatives with us.
I’m pretty sure the last sentence is a typo, but if Nigel’s numbers are correct, it would seem as if these policies are in-fact effective and have helped a lot of rugby players with their health claims. But if the majority of rugby players in America were returning each season, and already had health insurance that would cover any injury, I guess it is possible that they could one day decide to break away from USA Rugby and form their own organization under the assumption that they could get by with just their own health insurance policy. However, they would still need liability insurance to play on the fields. In the meantime, dues will be dues.
I hope I have provided some insight regarding getting CIPP’ed. If you have any questions, or feel as though I have made a mistake, Please feel free to contact me at 774-314-9124.
4. USA Rugby Membership Insurance Info
5. Department of Health and Human Resources Study
6. Article Regarding Nigel Melville’s 2013 letter