What Insurance NEMT Brokers Require Before You Get Trips

Why Broker Requirements Vary

Medicaid transportation brokers operate under contracts with state Medicaid agencies, and those state contracts specify the standards brokers must impose on their provider networks. Because state Medicaid programs are structured differently, and because brokers negotiate their own state contracts, the insurance requirements in provider agreements are not uniform. A provider operating in multiple states, or working with multiple brokers in the same state, may face different requirements from each agreement.

Requirements also change at contract renewal. A broker may raise its required limits in a new agreement. Providers who have not reviewed their broker agreements recently may be operating under outdated assumptions about what their current agreements require.

Coverages Commonly Required

Commercial auto liability is the foundation of every NEMT insurance program and is required by virtually every broker. The policy must cover all vehicles used to transport passengers, and the vehicles must be scheduled on the policy. General liability is required to cover premises and operations exposure beyond the vehicle, including slip-and-fall claims at pickup and drop-off locations.

Workers compensation is required in virtually every broker agreement for providers with employees. Umbrella or excess liability is increasingly required to provide limits above the primary commercial auto and general liability policies. Abuse and molestation coverage is required by a growing number of broker agreements, reflecting the vulnerability of the passenger population and the close physical contact involved in wheelchair and door-through-door service.

Additional Insured Requirements

Most broker contracts require the provider to name the broker as an additional insured on the commercial auto and general liability policies. An additional insured endorsement extends the policy's coverage to the named additional insured for claims arising out of the named insured's operations. The endorsement must be issued by the carrier and reflected on the certificate of insurance.

A certificate of insurance that lists a broker as an additional insured without a corresponding endorsement on the policy is not compliant. Certificates are evidence of insurance, not insurance themselves, and a certificate that overstates coverage creates a misrepresentation issue. Confirm with your broker that the additional insured endorsements required by each broker contract are actually in place on the policy before submitting the certificate.

The Vehicle Scheduling Problem

Most NEMT commercial auto policies are written on a scheduled autos basis (covered auto symbol 7), which covers only the vehicles listed on the policy. A vehicle that is used to transport passengers but is not listed on the policy is not covered. This is a straightforward rule, but it creates a compliance problem for NEMT providers who add vehicles to their fleet without notifying their insurance carrier.

A certificate of insurance that lists vehicles not scheduled on the policy is a misrepresentation. If a claim occurs involving an unscheduled vehicle, the carrier may deny coverage on the grounds that the vehicle was not insured. The broker may also terminate the provider agreement if it discovers that the certificate does not accurately reflect the policy. Every vehicle used for passenger transport must be scheduled on the commercial auto policy before it is used for trips.

How to Read the Insurance Section of a Broker Contract

The insurance section of a broker provider agreement typically specifies required coverages, minimum limits for each coverage, additional insured requirements, certificate of insurance submission requirements, and notification requirements for policy changes or cancellations. Read each requirement carefully and compare it to your current policy before signing.

Pay particular attention to the limits required for each coverage line. Some agreements specify per-occurrence and aggregate limits separately. Some specify that umbrella limits must be in addition to, not inclusive of, the primary limits. Some specify that workers compensation must include employer's liability at a minimum limit. If any requirement cannot be met with your current program, discuss it with your broker before signing the agreement.

Coverage Requirements Comparison

The table below illustrates the types of coverage requirements commonly found in NEMT broker provider agreements. Specific limits and requirements vary by broker and by state; the table reflects general patterns, not the requirements of any specific broker.

Before You Sign

Before executing a broker provider agreement, share the insurance section with your broker and ask for a written confirmation that your current program meets every requirement. If it does not, ask for a quote to add the missing coverages or increase the limits before signing. Signing an agreement that your insurance program does not support creates a compliance gap from day one.

Also confirm the notification requirements. Most broker agreements require the provider to notify the broker of any policy change, cancellation, or non-renewal within a specified number of days. Being listed as a certificate holder does not by itself guarantee the broker will be notified of a cancellation. If the agreement requires notice, ask whether your carrier will add a notice of cancellation to third parties endorsement for the broker.