Thursday, April 30, 2015

Hickman Mills Moves on From Blue Cross, Blue Shield

By Paul Thompson

The Hickman Mills C-1 school district has officially become self-insured. During its Thursday, April 23 regular session, the C-1 Board of Education agreed to a five-year deal with the Self-Insurance Pool of Greater Kansas City (SIPGKC) to provide health insurance benefits for district employees. The district previously provided employee health coverage through Blue Cross Blue Shield of Kansas City (BCBSKC), which had proposed a 16.2% premium increase for 2015-2016. After negotiations, the increase was reduced to 13.2%, but the figure still wasn’t amenable to staff.

“As superintendent, I felt like the last time I purchased a used car,” said C-1 superintendent Dr. Dennis Carpenter. “Given the work that we have to do in the district, I don’t think this administration can continue to recommend an arrangement where every two years we’re in a used-car salesman situation.”

Instead of taking the new figures back to his staff, Carpenter reached out to SIPGKC. What he found was that the district could realize an annual liability savings of $781,000 by switching from Blue Cross Blue Shield to a self-insured plan through SIPGKC. The agreement with SIPGKC represents a roughly 4% increase over what the C-1 district paid last year, but is around 12% less expensive than what was originally proposed through BCBSKC for 2015-2016. Plan options will remain roughly equivalent in the self-insured pool, although the Preferred Care PPO will be eliminated.

Mark Whiting, who serves as a consultant for SIPGKC, said that part of SIPGKC’s value derives from the fact that it is a non-profit organization that doesn’t prioritize profits.

“There are definite advantages of being self-funded,” Whiting said. “We have lower premiums, there’s no profit margin built in; we get to lose those things if we’re self-funded.”

SIPGKC’s Paul Kinder, a former superintendent of the Blue Springs district, noted that 69% of all school districts with more than 500 employees choose to self-fund their insurance plans. Kinder further explained some of the perks of joining the self-insured pool.

“The main benefit is volume=leverage,” said Kinder. “Another part that’s really helpful is, if you have a bad year, you could go ahead and do a pay-down as a school district.

“We’re able to reduce the ACA fees,” he added. “We’re talking about a 4.3% reduction right now.”
Board member Karry Palmer asked if any services would be disrupted because of the switch.

“There’ll be some change, but it will be very minimal,” answered Whiting. “The access is fabulous, and all the hospitals are involved.”

With the beginning of the 2015-2016 school year fast-approaching, Carpenter asked to board to vote on the proposal immediately.

“Our employees know that current policies that are put forth are becoming unaffordable for the district,” he said. “We’d like to have action on this tonight, so that we can get our open enrollment going.”

The board ultimately voted unanimously to join the self-insured pool, while at least one wondered how they could become eligible.

“So they’ll be able to go to any hospital that’s in their area?” asked board member Bonnaye Mims. “Okay, how can I get in that plan?”

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