Spike in school health insurance

CLINTONVILLE – Facing a 34% increase in insurance premiums next school year, the Clintonville Board of Education continues to gather health insurance information as it will need to decide soon on a new contract with a health insurance carrier.
The board held a special meeting on Feb. 3 for a presentation from Ken Zastrow, employee benefits consultant from National Insurance Services (NIS), about the district’s current health insurance status, as well as options for the future.
Prior to the presentation, Clintonville Superintendent Troy Kuhn reminded the board that the district switched its insurance to Robin two years ago. It was a two-year contract that included a maximum increase in premiums of 10% after the first year. The district is currently in the last year of the contract, so the district will need to decide how to move forward regarding health insurance for its employees.
Zastrow addressed the board at the meeting, and presented it with the proposed insurance renewal from Robin. He said Robin is proposing a 34% increase in insurance premiums next year.
Based on previous calculations that Zastrow and the district had done, Zastrow said he had been predicting a 50% increase.

The proposed 34% increase is due to the district’s previous claim activity.
Over the past 12 months, the district has a 170% loss ratio. For the insurance company, that loss ratio means for every $1 it receives from the district in premium payments, it is paying out $1.70 in claims, Zastrow said.
“We want to target that to around 80-85% number, and then we can probably see some favorable renewals,” said Zastrow .
Zastrow said the high loss ratio is due to around nine employees of the district who had medical insurance claims of around $2.2 million.
“Roughly 5% of the population is spending 95% of the claims,” said Zastrow.
Kuhn asked what the district’s increase in insurance would have been this year if it wasn’t locked in at 10%.
Zastrow said he was informed that the increase would have been around 30%.

Options
Zastrow said the district is currently enrolled in Robin’s broadest network. If the district wants to see some savings, Robin is recommending the district move to Robin’s Focus network, which is its middle tier of insurance. This would result in an 8-12% savings on the renewal.
Making that switch, though, would remove Ascension from the district’s insurance network. Zastrow said eight claims were made last year for an Ascension hospital in Appleton totaling around $455,000. Also, 16 claims were made for an Ascension clinic in the Fox Valley totaling around $28,000.

“Those would no longer be in-network benefits if we made the move to that network in order to save some money off the renewal,” said Zastrow.
Other options to save money would be for the district to change the medical benefits it offers, including increasing the out-of-pocket amounts and increasing deductibles.
Kuhn asked what an average health insurance deductible is at other school districts.
Zastrow, who said he works with 32 school districts, said Clintonville’s deductibles are in the average range. He added that other districts are starting to increase their deductibles.
Moving forward, the district will request bids to see if there is a more cost-effective health insurance plan available.
“I’m not optimistic that’s going to return great results,” Zastrow said.
He said before a health insurance company would bid on the district’s health insurance request, it would require the district to provide 24 months of claims data.
“Any bidding carrier is going to see you’re running at a 170% loss ratio,” said Zastrow.
The district would also have to provide its current renewal information from Robin.
Board Treasurer Jason Moder said the district should explore all options.
Zastrow told the board that the district needs to “start looking at alternate funding methods to help with insurance.”
“Try to take control of the plan a little more,” said Zastrow.