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Quick Facts

Industry: School District

Amount of Employees: 325 Employees (2,500 Students)

Type of Insurance: Health Insurance

Valued Client Since: 2007

Problem

A Wisconsin school district had numerous issues regarding the self-funded health plan, including plan management, a prescription cost issue, double-digit premiums, and a lack of employee knowledge about the plan. In addition, the district was anticipating a $500,000 shortfall in projected budget for the following year. Then the state’s governor introduced a state biennial budget, which increased the district’s deficit to over $900,000. The district needed to make some cuts and eliminate 20-25 jobs.

Solution

The district formed an insurance committee and hired an AssuredPartners public entity benefits consultant. The consultant prepared the RFP and sent it out to the marketplace.

The consultant worked with a not-for-profit insurance carrier who works specifically with school districts. Together, they created a new plan design (a higher deductible plan design with a medical savings account) that was 24% less (with a 2-year rate guarantee) compared to what the district was currently paying.

Results

The new plan included a “Post-Deductible HRA (Health Reimbursement Arrangement)” with a $2,000 single/$4,000 family deductible (any previous expenses that count toward the deductible were credited).

Here’s how it worked:

    • Given the mid-year plan change, the Board of Education wanted to provide a financial safety net for the district staff. Therefore, once an employee’s medical expenses exceeded $500 single/$1,000 family, the board approved an HRA to cover expenses until they reached a total of $1,000 single/$2,250 family.
    • If the medical expenses continued and exceeded that amount, the employee kicked in the remaining $500 single/$750 family until the plan’s deductible was met.
    • Once the deductible was met, as is the case with most high deductible plans, the plan paid 100% of covered expenses thereafter.
    • The consultant and the not-for-profit insurance carrier also introduced a new tier – the Employee-Plus-One tier – which had the same plan design as the family plan but offered those participants a lower premium.
    • The mid-year plan saved employees approximately $200 single/$800 employee-plus-one/$500 family in premium contribution.

Overall, the consultant and the insurance carrier saved the school district over $1 million dollars, avoided the loss of over 20 jobs, and allowed the district to increase all employee wages.

The following year the district kept the same plan but re-arranged the employer contribution toward the medical savings accounts, increasing the employee’s out of pocket costs by $250. They also provided participants with more options to plan for and save for future health care costs.