Chris Bosh is facing an uncertain future. That the Miami Heat could receive salary cap relief in the unlikely event that he does not return to play and it is determined that continuing to play would constitute a medically unacceptable risk is now widely known (and is described in detail in this post). There is also a separate, but related, concept at play which I offer because I have no seen it detailed anywhere else: insurance.
I do have one request. I try to write posts which I believe are unique, in depth and insightful. I hope you agree that this details an idea that you haven’t seen covered elsewhere. I therefore ask that you please not simply copy my work without providing proper credit. It feels rather awful to see it being exploited. If just you ask, I am more than willing to help out anyone and everyone in any way I can.
The NBA has secured league-wide temporary total disability insurance coverage for the benefit of its member teams. Every team in the league is required to participate in the program, which covers approximately 150 players per season.
That the league-wide program is mandatory is done for a key reason: Doing so allows the insurance provider to mitigate its risk, more accurately project potential claims, feel confident it is not being asked to provide coverage for only the most injury-prone players and, ultimately, reduce the cost of coverage and make it more affordable.
Such a program is possible only in a highly regulated environment like that in the NBA, where individual payouts are limited by maximum salary rules and teams are required to spend at least 90 percent of the salary cap each season on player salaries.
Under the terms of the NBA’s insurance program, each team is required to submit for underwriting consideration five players, each of whom must be among the team’s five highest-paid players based on either the current season or total remaining salary. Teams may submit for consideration more than five players if they so choose. Read more…