School eyes health insurance options
Medford School Board looks at options to lower premium increase
The $500,000 question for members of the Medford School Board is how much are they willing to spend to not rock the boat when it comes to making changes to the district’s employee health insurance plans.
The district is facing a 10% increase in insurance premiums for next year if the board chooses to remain with Security Health Plan (SHP) and keep the policy offerings the same.
Making an inflationary adjustment to the individual and family deductibles, which have remained the same since 2013, would shave about $200,000 and bring the increase to about $301,855 or 5.94% over what is currently being paid. An alternative plan offered by Aspirus Arise would see the district receiving a $25,564 increase over last year, or about 0.5%. The trade-off for this plan is that it would switch from the broad network option of SHP to a narrow-network of Aspirus and its affiliates with a fix to allow employees who live in the Eau Claire area to continue to see providers there. While Aspirus and its affi liates cover a substantial amount of the state the Eau Claire area is a notable hole. In a meeting that lasted more than three hours Monday night, members of the Medford School Board listened to presentations from both SHP and Aspirus Arise about what the benefits of their plans would be to employees. Board members then met with account executives Corey Toth-LaPointe and Becky Gorst of Spectrum Benefit Solutions to review the costs of each of the plan proposals and what this would mean for the district.
The goal of the meeting was to narrow down plan options for the board to make a decision later this month. One of the factors working against the district this year was that usage rates spiked compared to recent years. The district’s loss ratio was at 100.20% for 2019 with 868 members. This means that the insurance company paid out claims in excess of what the premiums collected were. This compared to the 86.26% loss ration in 2018 and the 86.93% loss ratio in 2017. Toth-LaPointe noted the district periodically would see spikes in usage and it was normal to see it.
SHP offered proposals ranging from a Marshfield Clinic-only plan to making no changes. Aspirus offered three plan options, the narrow network option, a point of service plan that would offer broad area coverage and a three-tier plan that would put more control in the hands of employees to decide where they wanted to see providers. The negative of the three-tier plan is that it would still increase premiums by $224,786 and that usage in each tier would create different deductible amounts meaning the potential for much greater out-ofpocket expenses.
Board members quickly narrowed down SHP options to leaving the plan unchanged or going with an option that would increase deductibles to $2,000 for single plan members or $6,000 for families. Raising the deductibles also brought up the question of how this could impact the Health Savings Account (HSA) contributions the district pays to employees.
Currently the HSA payments are equal to about half of the deductible amount with the question of if this would be increased if the deductible was increased. The board will look at the options of lowering the amount of HSA contributions or keeping it the same with respect to the overall costs.
Dede Strama spoke in support of the Aspirus narrow network plan with the possibility of offering the point of service plan as a buy-up option for employees that wanted more flexibility. It was noted that last time a buy-up option was proposed it was cost prohibitive for many employees with some who would actually have to pay the district each month for it. However, with about two-thirds of all claims payments already being made to Aspirus providers or their affiliates, board members noted the impact on switching to a narrow plan may not be as great as it would seem.
Board member Cheryl Wibben drew the distinction between insurance offering by the school and the private sector. She noted that in the private sector workers have no choice but to take what their employers offered. “I don’t get a choice,” she said.
Gorst said that if she was making a recommendation to the district, it would be to go with the SHP option with the slightly increased deductibles and adjust the HSA payments so that it was not tied to being 50% of the deductibles.
The district spends about $4.5 million a year on health insurance premiums. By comparison in the 2019-2020 school year expenditures across all district accounts was about $35 million. District finance director Audra Brooks said the proposed 2020-2021 school year budget includes roughly a 10% increase in insurance premium expenses which means either the SHP option or the Aspirus option would result in sizable budget savings. That budget remains tentative until approved following the annual meeting in October.
Board members will take up the options at their July 27 regular school board meeting and decide at that point on which option to take.
