Rolla School District employees will pay slightly higher for health insurance after Oct. 1, but thanks to the district’s “pool,” the premium hike won’t be as high as it might have been.
“We are recommending we have a 7 percent increase,” Assistant Superintendent Kelly Hinshaw told the Rolla Board of Education Thursday night. “The trend for groups our size is 11 percent.”
Moreover, he said, “Nine percent is what Blue Cross/Blue Shield would recommend.”
Hinshaw said the 7 percent increase will be sufficient thanks to the size of the pool, or reserve, so “we don’t have to pass on the entire increase.”
The board unanimously approved the recommendation, which was the result of collaboration among the administration, the Supporting Student Success Committee and the faculty’s Salary and Welfare Committee.
For the “certificated staff,” faculty and administrators, the monthly premium for the year starting Oct. 1 will be $465, up from the current premium, which is $434. The district pays this amount as a benefit.
The premium for spouses will go from $434 to $465 per month, while the premium for children will rise from $300 to $321. The combined rate for spouse and children will be $786, up from the current $734. These are employee-paid premiums.
The district-paid premium of $6.50 for $50,000 of life insurance for district employees will remain for certificated and support staff.
The health insurance premiums for active support staff will rise from $475.40 to $508.68 for each employee per month. The district will pay $457.82 and the employee will pay $50.86. Currently, the district paid $427.86, and the employee, $47.54.
The cost for spouses will rise from $463.14 to $495.56. The cost for children will rise from $328.14 to $351.10. The cost for spouse and children combined will rise from $741.50 to $793.40. The employee pays these monthly premiums for spouse and children.
Hinshaw opened his presentation with a brief historical overview.
Since Oct. 1, 1993, the district has been self-insured for the certificated staff. This came about because that fall, Travelers, the district’s insurance company, sought to raise the monthly premium for each employee from $125 to more than $195.
Turning down that fee hike, the district set the premium at $160 and began as a self-insured district.
The premium increased one time between 1993 and 1997 to $170, he said. There was another rate increase in 2001.
“We have learned a lot since then to manage our own fund,” he said.
In 2002, the board-paid rates increased by 15 percent, as did the dependent rates.
“In 2003, we budgeted for a 30 percent increase and 5 percent increase for 2004,” he said.
For the support staff, the district offered a fully insured plan, not part of the self-insurance program, from Jan. 1, 2002, to the fall of 2007, underwritten by Blue Cross/Blue Shield. It was a two-tiered plan with coverage choices.
Page 2 of 2 - In 2007, the board approved the unification of the plans in the self-funded pool.
The district collects the monthly premiums and keeps them in a separate fund from the other school operations. That pool or reserve is only for claims.
Anthem Blue Cross/Blue Shield is the district’s re-insurer, providing specific stop-loss to cover claims greater than $125,000 per employee, spouse and dependent. Anthem also provides monthly stop loss to protect the district in the event of a large claim in one month.
Finally, the company provides aggregate stop-loss, an umbrella type of coverage, Hinshaw said.
Anthem also provides access to network discounts and has the fiduciary responsibility.
Gene Maurer is the local agent.
Hinshaw said the district in the first nine months of the current fiscal year has experienced $5.69 million in claims, up from $4.7 million for the same time period last year.
Projected claims for the full year total $7.97 million. Actual claims for last year totaled $6.53 million.
Network discounts are expected to lower that number by $3.45 million, so the actual claims paid out by the district’s insurance pool is expected to be $3.43 million.
The ending fund balance is projected to be $3.5 million, down from $3.86 million at the end of the 2011-2012 fiscal year.
In response to questions, Hinshaw said the cause of the increase is both more expense per claim and more claims. Federal law has added some requirements that affect all insurance programs, even those like the Rolla school district’s plan, such as the requirement that dependents may remain on the plan through age 26.
Maurer noted the Affordable Care Act also requires a $5.25 per month for each person covered by the plan, employees, spouses and children, to be paid to the federal government, starting Jan. 1, 2014. There are more than 700 people covered by the plan.
That money will be paid into the “exchanges” to help cover people who don’t have insurance.
Hinshaw noted that money, by law, will have to come out of the district budget, not the insurance pool.
There are other fees, too, that come up as more is learned about the new health care changes.