Falls changes to self-funded insurance

District keeps Humana as provider; plan options still being discussed

Oct. 9, 2012

Menomonee Falls - The Menomonee Falls School District will begin operating its health insurance plan on a self-funded basis in January, which will save the district an estimated $400,000 next year.

The School Board on Monday voted to keep Humana as its health insurance carrier in 2013, while switching from a fully insured health plan program to one that is self-insured.

Human Resources Director Christiane Standlee said the switch will save the district an estimated $200,000 over the course of six months, or about $400,000 in a year - about 68 percent of the nearly $600,000 the district budgeted to save by going with a self-funded plan.

According to a memo from Standlee, under the fully insured plan the district now has in place, the district pays the full monthly insurance premium to Humana, including significant administrative fees within that cost, and Humana pays the district's claims. If total claims submitted by district employees are less than the total premium paid by the district, Humana keeps those profits.

Alternately, under the self-insured plan, Humana would send claims to the district for payment after applying any discounts and plan provisions, Standlee's memo explains. While the self-funded insurance plan will oper ate on the same basic level for district employees who use it, the district will ultimately pay less administrative profit to Humana, resulting in the anticipated savings, Standlee said.

In the process of selecting which carrier to use, Standlee said the district also considered plans through Anthem and UnitedHealthcare. Through market analysis, it was determined that Humana offered the best self-funded option, with lower administration costs and a stronger contract offering.

Additionally, staying with Humana will allow continuity, with the same providers and pharmacy vendors available to employees covered by the plan and same service staff available to Human Resources.

The board also is prepared to take action at its next meeting on choosing the plan design that will be offered to employees next year. The board discussed three suggested plan options in closed session on Monday, with the intention of narrowing the choices to a preferred option that would be presented to teachers and the public.

The plan designs being considered could save the district up to an additional $400,000, depending which plan is selected, Standlee said, enabling it to meet its budget goal of reducing health insurance costs by $600,000.

Board member Paul Tadda pointed out that those projected savings are not guaranteed to materialize. However, Standlee noted that the consultant the district is working with has been very successful with its predictions.

Each of the three plans under consideration would offer employees three coverage options, ranging from a low deductible plan, for which employees would pay a higher premium in order to have a lower deductible, to a high deductible plan, which offers a lower premium but a higher deductible, as stated in a memo from Standlee.

All of the plans provided good coverage that is competitive in the marketplace, the memo also states.

Board member Faith VanderHorst stressed the need to make plan information available to the public as soon as possible.

Employee informational sessions will be scheduled during the next two weeks, with the board poised to take official action on the plan design at its Oct. 22 meeting.

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