Good evening. I would like to call to order this Anoka Henipin special school board meeting for today, May 12th, 2025. Please join the board in pledging our allegiance to the flag of the United States of America and to the stands.
nation under God, indivisible, with liberty and justice for all. Our first order of business is to approve the school board agenda. Is there a motion to approve the agenda as presented? So moved. With a motion from Director Simon. Is there a second?
Second. Oh, thank you, Coacher Arco. Uh, any discussion? Hearing none. All in favor of approving the board agenda say I. I. I. Any opposed say nay. With six in favor and zero opposed. The agenda is approved. Our next item is item four,
labor relations and benefits setting health insurance premiums/ rates which is set for approval tonight. We welcome Dr. Jennifer Cherry, executive director of human resources and Todd Mensing, director of labor relations and benefits. Thank you.
Good evening, co-chair Dashaine, members of the board, Superintendent McIntyre, uh uh Director Meninkin and I are here this evening to share with you information about our district insurance
plans and recommend rates for the 2526 plan year. uh just a little uh information about uh our insurance plans and information that we do receive from stakeholders. We do
have an insurance advisory committee uh that uh assists in reviewing this information with us. I we have about 26 20 almost 30 people on our insurance advisory committee. Um and we have
representation from all of our employee groups. Again, those stakeholders come together on a regular basis. Um approximately five times a year uh to continually um provide input and review
uh the status of our insurance plans. And with that, we'll hand it over to Todd and he'll walk through our presentation for us. Right. Good evening, uh, co-chairs Arco and Dashaine, members of the board, Superintendent McIntyre. Uh, to start,
as a self-insured district, uh, we pay our own insurance claims and set our own premium rates. Uh, so if we were to purchase uh, insurance uh, off of the market, we would be given premiums. uh because we're self-insured, we need to
set those premiums in order to cover our expenses uh and ma maintain an acceptable reserve to cover any variance in claims or runout expenses we we incur. Uh we have consultants at AON who provide analysis to establish rate recommendations. Uh we work very closely
with an actuary uh on this information and our um claims projections, administrative fees, stop-loss insurance, rebates, discounts and and other costs associated with administering the plan are included in their
analysis. Uh we'll start by looking at dental rates. Uh so this uh shows uh some underwriting information on our dental plan. Um, as you can see, we have we have a little over $5 million in uh
dental uh aggregate paid claims every year. Um, uh, and uh, currently our dental rates are $85 with the district contributing 80 and employees contributing $5. We haven't increased the dental rates in several years
because we have a very, very healthy fund balance. um that fund balance. Uh so so we've been setting the rates uh lower than than uh normally required to spend down that fund fund balance, which
was still at about uh 1.6 million and it really only needs to be about a quarter of that uh as of last year. If we don't increase the rates this year, um we'll we'll fall behind the um you know the the recommended fund balance. So, we're
recommending a $5 increase in the dental insurance uh uh rates this year. If you move to the next slide, um yeah, so this just highlights uh our recommendation um is that we increase dental rates by
$5 a month to $90 uh for this year. Moving on to health insurance rates. Uh and this is really the bigger issue. Uh on this slide you see our current insurance plans. Uh so we have one kind
of Cadillac plan, the choice co-pay plan that has no deductible, an open access network. You just pay a $25 to $100 co-pay uh when you need to go in and access care. Uh you can see we have a little over 700 single and 200 family
members on this plan. Uh, and then we have three plans that utilize this deductible 8020 plan design. So there's a $1,500 single and $3,000 family deductible. Uh, and once you hit that deductible, there's co- insurance of 20%
until people reach their out-ofpocket maximum, which is 3,000 for single and 6,000 for family. Uh, of these three plans, the one that's uh, used most often is the choice 8020 plan. right now. When we went to United Healthcare,
they didn't have a network equivalent to Elect, which has Alina, Riverway, and Park Nichollet. Alina's by far the largest uh provider in our area. Um, and so we saw some movement to elect last year, but the rates were set very close
and and uh we had more people deciding to to stay on the choice open access network. And then Vantage Plus is our least expensive plan. Again, it has that same plan design but utilizes M Health Fairview uh network. Uh here's uh uh so this is the
executive summary from AON uh dealing with medical pricing um and the status quo. Um so the forecast forecasted increase required is a a 22% increase um in total premiums uh per employee per month. that comes to about
$295 or $15.3 million. Uh so currently uh our I at our current premiums we're projected to um get about 68 million uh dollars and then that extra 15 million's needed um to get us to 83 which is where
we uh need to be in order to uh maintain a solvent plan. uh going into this uh the market trends there are showing the inflationary factors we're looking at. So medical claims um are going up 8%
this year. Uh pharmacy claims 13. So the overall trend is 9.3%. In the past that trend was closer to 6 to 7. So part of the reason for this rate increase is that the cost of medical care is coming going up faster
than uh previously. Uh a a few key observations here are that drug trends continue to increase um due to specialty medications and GLP-1s. Uh GLP1s are uh generally for weight loss or or diabetes. Um it's a new class of drugs
um that uh is contributing to our our higher uh rates. um experience in the second half of the last plan year deteriorated badly and in a upcoming slide we'll show what that looked like. Um and that the other thing is the last
plan year was an outlier in terms of high claims um the severity of claims. We had 11 members with costs over 500,000 and 26 with costs over 250,000. Um so we were hit uh particularly hard last year. Um we and
our our claims appear to have leveled off a little bit but they they uh haven't been going down. Um in terms of method methodology um they used his historical data to forecast our expected claims
um and um you know we look at a point in time and project forward. If you go to the next slide, uh this slide shows the historical claims trend. Uh and if you look at those red arrows, um they kind of show that. So,
so we're using claims through February. Uh and that's kind of what we do every year as we set claims. We bring them to the board in April for prior uh for the um first reading and then usually the first board meeting in May for the uh
the final reading. Um, and you can see last year, uh, we we had, uh, there there started to be a spike there, um, with the February claims. Um, but it wasn't clear if that was a, uh, a moment in time and and claims kept going up.
So, we saw a 20% trend last year. Actually, you know, rates went up 20% over the the prior year. We had set our rates a little below 10%. Uh so there's a there there was a real unexpected increase um in the last year and it
really started just as and and really took off just as we set rates a year ago. Can I pause for just to just add a little bit more commentary? This is a really important slide for us to understand our our claims when we find this information at what point in time
and then how we project forward. Right? So what we see here with the light blue bar is uh two years ago. So we were uh with UHC at that time. Now we're with Medicica. Um but we used that
information at that point in time in February of 23. We still had six more months of of data or claims that were coming in after the rates had already been set based on what we projected that
year to look like. So with that first red arrow, that's where we were setting uh claims for the next plan year, which you see in the blue um the blue box there, UHC year 2. Um when we set uh the
claims in um February of 24, that red arrow right there, we were setting uh rates based on just information up until that point. What you see there is a a pretty large progressive increase in
claims in the next six months. We didn't know that information um that our claims were going to come in so high. And so last year, had we known that the claims were going to continue to increase, we
might have set our premiums higher last year, too. So now we're kind of playing catch-up. Uh so we've had to um spend down some reserves to help um pay out those claims. So now what you see on the last bar there, February of 25th, uh
February of 25, that's the point in time we have this amount of claims data now and we're setting premiums for next year. We're using history to project forward where we're going to go. And so, um, if that, as you can see, our claims
have started to level out a little bit, but, um, we're trying to project forward. Is that trend line going to continue to increase or are we going to level out or are we going to dip back down to where we had, uh, been in previous years. So those are all factors
that we're considering and we want to again ensure that our premiums are set at a rate where we can continue to fund the claims as they come in next year. And that's the the really the actuarial that helps us um uh determine uh our
best projections. All right, if we move to the next uh slide, this shows our internal service fund. Uh so this is uh the uh it's fund 20. Uh so we this is where we collect our premiums. We put them in this fund and then and then we pay all of our
expenses out of it as well for the uh and this is only looking at health. Um there's a portion of fund 20 that's set aside for dental and for workers comp insurance as well. Uh but you'll notice uh through time we have the the blue and red lines which are expense and revenue
and they ran um largely hand inand we tended to increase our rates uh to to a similar amount uh as what expenses went up. Uh if you look at the green line at the bottom that shows uh where our reserve is and then the two dotted blue
lines show the range that uh AON says that we should try and maintain which is 24 to 30% of variable expenses. Uh and if you look at 2023 you'll note we're right in the middle of that range. when
we set rates in 2023 uh for 2024 uh like we had said using claims through February, we were anticipating that it would lead to uh still being in the middle of that range um in
2024 and we saw it dip to the bottom of the range um because of that experience at the end of the fiscal year. And then this year we saw, you know, a a precipitous dis decline as those uh those rates continued to increase. So uh
we're now actually below the point um where our incurred. So um if you look at that 24 to 30% about 10% of it needs to be to cover incurred but not reported claims, claims that we've incurred but have not yet paid. um and and we're
actually below that that portion. Uh and then the remainder is there to really cover variance in claims. So um it's because we had the fund balance available. Um you know otherwise we would be borrowing from the general fund right now uh in order to to fund the
health fund. If you move to the next slide. Uh so this is a called a waterfall chart and this uh I identifies what went into uh the the projected increase here. So again the trend um is that medical and
RX trend at 8.7%. Um and so 9.3% on claims um results in an 8.7% increase to premiums because there's other costs um associated with the claims or admin fees and stop-loss
insurance that that aren't included in that. Our stop-loss insurance is uh is insurance we hold to cover any claims over $500,000. Uh and we also have aggregate stop-loss which will cover um all of our
claims if we exceed 125% of expected claims. Uh we just so you know Medicica when they set our aggregate stop loss also was not expecting our claims to go up that much. Um so we're actually uh
projecting to get somewhere near that uh 25% near than we've ever been uh before. I still don't anticipate we'll actually need to use aggregate stop-loss. Uh but the stop loss had a 14% increase uh negotiated into our 2-year contract. Uh
and so the the that 14% increase represents a half a percent. Um our admin fees are are were set with no increase uh for the two years. And there are also some credits included uh about $512,000 worth of credits um each year
in the plan. So that um isn't included in these costs as a as a reduction. Uh if you look at the the the big uh cost here is the experience gain or loss. Uh so that's where we are 9.7% higher than
what we were anticipating a year ago. And so we need to um you know move up to being able to fully fund and and then uh cover that inflationary increase. Uh and then there's also 4% built in for
reserve load. Uh so you know ideally we'd like to get to that 24 to 30% but we can't do it all in one year. Um, so the strategy is over several years, um, we'll we'll try and build in, uh, that 4% to try and get up, uh, back up to to
where our reserve is healthy. All right. Uh, next, uh, just want to talk a little bit about cost containment considerations. Uh so AON came to us with a number of options that could reduce the uh the the increase in
premiums by uh reducing the benefits on the plan. Um so here you see sort of a a variety of different options. Um starting with making uh prescription drug co-pays subject to deductible. Currently they're not. Um but that's
only a 3%. Um and and then they gave examples of increasing prescription drug po co-pays. Um three different options for increasing uh deductibles and out-of- pocket maximums. Um and then uh
increasing that co insurance from 20 to 30%. Um so and then they if you see scenario number seven is combining sort of all of those cost-saving measures and it would represent about a 3% reduction in the amount that needs uh an increase.
The other thing uh we looked at was the removal of GLP1 coverage for weight loss. Um so GLP1s are a fairly new uh strain of drugs. They've been around about uh three years. Um and and they're
really hitting all plans right now um that that have them. And so we looked at uh and brought to our committee the possibility of um eliminating GLP1 coverage for weight loss. Our plan has always covered weight loss drugs. Uh but
this uh these are new weight loss drugs that are more effective um than than others. And most people aren't taking them just to lose weight. They're taking it because they have sleep apnea or some other condition um where losing weight would would assist them with it. Um so
uh AON came to the committee uh and shared these different options. If you want to move to the next uh slide, we can talk about it. Um so overall premiums again like I said need to increase by 22% or
154.4 million to cover expenses. Um the plan design changes including the elimination of GLP1 coverage um and and those increases to out-of- pocket costs were shared with our insurance committee as options to offset some of the premium. our our committee members
sought input from their respective employee groups um before providing additional feedback with administration via Google form and we didn't have consensus uh from our bargaining groups about implementing uh any of these plan design changes to reduce the value of
benefits uh by state statute. So you're aware uh we can't reduce the aggregate value of benefits. It's a negotiated item. Uh the statute says we can't reduce that aggregate value without the agreement of all bargaining groups. Uh
and so it was administration's um opinion that we we well and and from the feedback we got we we didn't uh feel that we would be able to get um every bargaining group to sign off on this. Um so our our suggestion is to um keep the
plans as is uh and increase the um the co-pays. The concern would be if we did implement those changes. Just a second. You just said increase the co-pays. Oh, I'm sorry. Increase the premiums. Yeah. The concern would be if
we did increase the co-pays or we did cut the GLP1 coverage, we could have a grievance that would require us to go back and um still provide that coverage and then we would have set our our uh premiums so that they wouldn't cover them. Uh so we we don't suggest taking
that risk. All right. So, moving on to our rate recommendation. Uh uh so for I'll start with our current health insurance premiums. Um so at the top you can see our single plan. So our most expensive single plan is $1,20 a month. Our least
expensive one is $810. And the current district contribution for all groups is $810 uh for all groups with a fixed contribution. Uh and so there you can see the employee share per month. Uh and then our employees uh have their
insurance taken out over 20 paychecks during the school year. And so there you can see the per paycheck amount employees are paying is between 0 and $126 for single. And that means that the district is covering between 79 and 100%
of the cost for singles. If you go down to families, you can see um the the premiums are between 27.80 and 21105 a month or 21105 and 27.80. And we currently have a district contribution of
$1,515. Um, so the employee contribution ranges from $590 to $1,265 depending on plan. And on a per paycheck amount, that's $354 to $756. Uh, and then you can see as well
that so the district is covering between 54 and 72% of the premium uh for family. Moving to the next slide. Um, currently the district negotiated a 5% increase to health insurance premiums
with those bargaining groups whose contracts were settled last year. Um, so the single contribution went up to 850, the family contribution to 1590. And they also all have a dual spouse benefit where if a two uh
employees are married to each other, they essentially get the single plus the family contribution. Um, we have eight bargaining groups currently o with open contracts. Uh, and they may or may not end up agreeing to this standard contribution shown above.
So, we're using it for um demon demonstrative purposes. Uh, but it's possible uh these other groups uh might want to negotiate more on insurance and less on salaries or um or you know or
negotiate less on insurance and more on salaries. So, um, since we still have those eight open contracts, uh, we can't necessarily say where everyone will land, but this is, um, we're going to use these amounts just because if if, uh, people settle for the budgeted
amount, um, this is what it would look like. So, if we move to the next slide, um, we're we're offering two options. Uh, one is a 22% increase uh, to all plans. Uh, one thing I'll note is that
22% increases to the overall premium because the district pays a larger portion of the premium than the employee. And because the district contribution isn't set to go up by as much, that means the percent increase the employee is going to see is going to
be higher than this uh the the increases we're we're looking at. Um, we're providing two options here. Uh option one is uh a flat 22% increased all plans. Option two would increase the choice plans by 23% and the elect and
vantage plus plans by 20%. Um the the rationale behind that is that there's a suggested decrement between our plans. U so the the elect plan is supposed to be 6 to 7% less expensive than the choice plan. That's how much it's projected to
save when people move from choice to elect. And Vantage Plus is supposed to be 2 to 3% lower than uh elect. Uh and so by increasing those lower plans by a little less than the high plans, we can
get that same um total dollar amount. Uh but we will um get closer to that decrement we're looking at between plans. and it will give people an option for uh to move to those lower plans and have
a smaller increase. Uh so this uh slide shows uh option one. Um, so you can see uh the increase of 22% would result in single premiums going uh up to 990 to
$1,245 and family premiums from $2570 to $3,390 a month. Uh, and you can see uh the district share is that 850 and 1590 we shared on the previous slide. Um, so that leaves the employee share uh for
single uh going up to $140 to $395 a month and the uh and for family up to 980 to $1,800 a month. Uh and then you can see what that is on a per paycheck basis and the total change per check.
Um, so if you look uh up at the single plans, you can see uh the the choice co-pay, they'll be up to 237. It's $111 per check. So um it's it's a sizable uh increase. Vantage
plus820. They were at zero. Now they'll be at 84. So there's an $84 increase. Um and I if you you look at the share of the premium paid by each uh on the on the previous slide I believe we were running from about 80 to 100% district
um uh with the uh the current budgeted amount uh this would be more uh like 68 to 86% for single and for families 47 to 62% uh covered by the district. Uh the next slide here you'll
see option two. Uh so uh this option is to increase the choice by slightly more than elect. Uh because we have more people on choice right now. Um you only need a 1% increase in choice uh to pay for a 2% increase in elect a 2% cut in
elect and and Vantage plus. Um so here we have in we have uh increases from 970 to 1255 for single. um and increases to 2520 to 3,420 for family. Um and if you
move over, you can see the per check amounts. Uh uh you can see the uh district share and employee share and and you know, we put in red that change per check because we think that's probably the most important thing um you know that we need to consider the impact
it has on the employees. Uh so this would be a 72 to $117 increase per check for employees. um uh for single and between 204 and 339 for family. Uh and you have very similar
because the these rates aren't a whole lot different than option one. The percent paid by the dis district is fairly similar. All right. The district administration is recommending uh recommending increasing the vantage and
elect plans less than the choice plans uh in order to provide a lower priced option while also bringing the plans closer to that suggested cost decrement. Um we again uh we think in introducing plan design changes that may result in a
reduction in the aggregate value of benefits is not recommended um without the consensus of all bargaining groups. And that may be something we could look at in the future as we have more conversations with our uh our insurance
advisory committee. Um, so, uh, moving forward, our next step, our open enrollment is scheduled May 27th, uh, to June 11th. Uh, our open enrollment materials actually need to get to the print shop, uh, tomorrow in order to, um, to make that timeline. Uh,
and then our insurance uh, uh, year starts September 1st. So, this is kind of always what we've done is have the uh, open enrollment just before school gets out. Um, so, uh, we can get the communication to employees while they're
still here and I not gone over the summer. Uh, and then the the new plan year starts right with the beginning of the new school year. So, this this final slide um just shows our final rate recommendation. Uh, so again, we're we're recommending that
option two. Uh, and you can see the rates right here. Uh we're also recommending the dental rate uh be be set at $90. Our dental plan's a little different. It's uh um combined. It it
costs the same for single or family. And with that, this is our recommendation again board. Uh we are looking at um uh approving looking for approval of our monthly premiums uh for each of these plans for both singles and
families. At this time we are not um asking for uh board consensus or board direction on district contribution towards those premiums. At this time it's really about rate setting of our premiums. And so with that, we're open
to any questions or comments that you might have. Um, and hoping Thank you, uh, Director Odette. Thank you. Um, I have a couple, uh, questions. So, the first um I just saw
it in the news today that President Trump signed an executive order that seems to have the um potential to significantly reduce the price of prescription medication, which you know, if it did, um could obviously have a significant
impact on the price of the drug drug benefits. And I'm sure people might wonder how could that affect the rates for this year? And um and so I guess I I had I'm going to
connect that to um and I want to make sure I understand. So for the the fact that our bargaining groups weren't able to consense on uh removal of GLP1 coverage, I it's for that reason that we we don't see that as an option in the what was presented.
Right. And but you said perhaps in the future if that so maybe because the two things are sort of similar in the fact like in the future how might you see in the future is does that mean we'd have to wait until the next plan year um in the case
of the GL if that GLP1 coverage got consensus and now we're talk a little more hypothetical if this executive order were to impact drug prices might that have to also wait until the next plan year. Has has there
been a case before where we in the middle of a plan year made any changes to the rates? We've never made changes in the middle of the plan year. I I would anticipate if if that those measures were effective, it would make it so there's
not such a Yeah. steep trend next year. Okay. So yeah, I mean the the prices would even if they impacted us midyear, the the the actual expenditure on those could potentially go down and it would get evaluated at that time. Yeah.
Um a couple of things. We pay our claims as they come in. So as you know, as healthc care um doctors um uh providers are submitting claims, right? it takes a couple of months for those claims then to come out in and for us to to process
and pay those out. So, I'll just um kind of address the first question, the more the hypothetical one. If we see at the federal level that there is a a reduction of um prices for these uh specialty medications, uh we would um
take that into consideration with the next next plan year again as we're looking back in order to project forward. Um and uh and then the the second one about plan design changes, right? If we um come to consensus, this
is something that our insurance advisory committee is is uh really going to be leaning into as we look forward into the next year. Um as costs continue to go up, um we are going to have to find ways to reduce um reduce the plan benefits in
order to again continue to fund the plan. So, we're going to have to come up with some creative solutions. Okay. So, GLP1s, I I think we'll be coming back to the conversation. Uh just about the GLP1s in particular, a little bit more information on that. It seems
like we have more research that's coming out almost on a daily basis about not only uh GLP1s for weight loss being a cost driver because of the increased use and the long-term uh need to stay on uh
the the um uh medication for that continued benefit. Uh so we know that that increases an ongoing cost, but we're also starting to see more research come in about uh some ancillary benefits
of being on the GLP1s where it um is has the potential of reducing some other long-term costs such as muscoskeleletal or um uh other large uh issues with uh heart disease and other factors that also we know drive some high cost claims
as well. So there's a little bit of a a mixed review right now on where the um trend line is is headed in the future. Right. Okay. Thank you. Superintendent McIntyre. Yeah, I got a that's an interesting question, director Audet. So
just maybe just play off that. Um my wondering is a bit procedural, but let's say we see that significant drop happen. I mean, I think it requires an act of Congress and so forth or those things, but they all let's say that plays out and if we wanted to reset rates, would
we also have to then maybe people would want to change plans? We got to do a second open enrollment like or would we just need consensus amongst the committee? So, we've never done a mid mid mid plan adjustment, but we've never also seen a an increase like this. So if
if there was a dramatic shift, maybe we do rethink that. But I don't know what set of things that sets in motion. Like if it dramatically shifts, I might want a different plan because now I I can change my mind on what I want to spend my my my money on. So that becomes a bit
of a logistics question in my mind like can we manage capacity wise those kind of changes to people coming on and off plans through our process. So maybe I answered my own question, but um it's an interesting one. I think one we should
definitely think about if there's a big swing the other way. At least allows us to reset the next cycle if we can't mitigate it mid midstream, right? And I'll admit I'm not prepared for that question. I would want to run it by AON.
I it's worth as far as whether we can do a midyear change like that, I'm I'm not sure. Director Lingfeld, thank you and um thank you for your presentation. As we think forward, and I appreciate uh Director Adet's statements about
potential future things we don't know, one of the things that I think is really important because one of our board priorities is recruitment and retention that we have representation of board members on that insurance advisory to
monitor closely what's happening as well. So, I reached out to Dr. Cherry and to the superintendent to make that request. I really think it's vitally important to have one or two board members. That's been my experience and I think it's just very helpful to keep us
surprised. Thank you. Uh coach, um what are the advantages of having or of being selfinsured like the district is versus otherwise? Yeah. Uh there is well first there's some tax advantage. There's certain
taxes that you don't have to pay because you're self-insured. Uh but but the big benefit is comes actually when you have a good year. Uh so if we were fully insured, we'd be we'd be uh you know paying a a insurance company and they
would be setting reserve and they'd be building that uh reserve uh cost into their rates. Um, and there's a chance when you have a bad year like this, I mean, ultimately, if we had had a bad year like this and we were fully insured, the insurance company would be
coming to us with 22% rate increases. But there's years we actually have, you know, when we have good years and and come in below and then we get to keep that it and it builds up in our reserve and it allows us to um ease increases in
the future, which is kind of what we've done with dental. Um, yeah. Superintendent McInty. Yeah, I just thought it might be worth sharing. We we we did a bit of a poll with our AMSD districts. I was just curious like what what's the experience around the metro
right now and and uh that does for us include um Rochester, St. Cloud, Duth, and Mano. Um, and of the 22 districts that did respond, um, over half are seeing double digit increases and a third are seeing more
than 15% and we're one of three that are seeing an over 20. And I talked to two others that were at 18 last year, but then came down to five this year. So, it's a little I mean, I think you kind of laid it out. It's your your history tells you you're leaning on that history
and it's hard to project forward. I was thinking as I listened to you present, you were the committee was still making decisions April 23rd, 5 days ahead of our scheduled meeting that got cancelceled because of the weather. So we were trying to get every last bit of data to help make some um decisions amongst that group because
all the employee groups are are part of that. Um um so no board members that was being evaluated right up to the two days ahead of the packet being published had we had that meeting um as scheduled. So, just some information that might be helpful to you.
Director Simon. Thanks, Casey. Um, going back on the self uh Director Arco's um question on the self-insured. So, if you are not self-insured and you run out of your reserve, what does an insurance company
do? They take that on themselves. Yeah. So if you're fully insured, not self-insured, you don't have the reser. We wouldn't have their reserves. We would just be paying I'm talking if the insurance company runs out of their reserves. Yep. Because they're they're building reserves, too, obviously.
Right. Yep. They would increase our rates, right? They would just continue for the next cycle. Yeah. For the next cycle. They they wouldn't run out of reserves because they have a much bigger pool of reserves than we do. I Yeah.
Yeah. I just I this is the first year that I'm just curious if self-insured is the right thing to do, you know, like going forward. So, I don't know just just um because you think about the risk. If you're self-insured and your
reserve runs out, you take it from the general fund, borrow it, you said, but that's taking money from the general fund. So, I don't know. I just wonder if um when is the next review? Is it next year review? because we're in the second year of a two-year contract. Is that true?
Correct. I'm just wondering if it it's good for this board to and for you folks to do a deep dive into what that means. And it just might be even more easily understandable for our staff if we don't
have to talk about things like we have to add 4% in there to build our reserves up more, you know. So, I don't know. It's just a thought. this is the first year that it really has negatively impacted the district, our our pool of folks and the use of healthcare. So
maybe it'd be it's a good time to look at that really in depth. Thanks, Superintendent McIntyre. I I'm glad you asked that because I was um curious about this too and I wondered about does that is the is the downside it takes away our ability to negotiate that in
the compensation package. If we're fully insured, they're going to set the rates. We have no say in that if I'm understanding that correct. So as we walk into negotiations that's predetermined in essence for us. So the negotiation item is just the district
contribution towards the rates. Right? So whether we're self-insured or fully insured. So we'd still negotiate that. We would still be negotiating that. Thanks for clarifying. But we would then be negotiating also with an insurance company uh about those rates. Right.
Think about think about your homeowner's insurance, right? You you have a big hail storm and everybody gets a new roof, right? Uh guess what? Even if you didn't get a new roof that year, it likely might be that you have an increase in your homeowner's
insurance because that's been the experience of that insurance company where they've had to play all those high claims. Yeah. Uh Director Simon, do you mean I'm really um stressing you? I didn't let you know these things. It just came to
my mind, but um do fully insured folks negotiate every year or do they negotiate like us self-insured on a two-year contract or or multipleear contract? It's on a two-year contract. So, it's the the same statute, the Health Insurance Transparency Act
governs both. And so you uh you would uh enter into a two-year contract that normally would have a cap for the amount of increase the second year. Uh but not necessarily. Uh okay. And then we do every time we do
go out, we have gone for a PE bid. I know which is really like being fully insured. It's it's a statewide plan that you know you would purchase in you know buy into. Uh we haven't gone for traditional fully insured bids before. Oh, we could. We could. That's illegal.
Okay. So, is Todd um when you talked about the two-year contract and there's caps, did we have that in our current two-year contract, did we have a cap to increase? We Well, we did on our stop loss. Um so, our stop loss couldn't go
up by more than 14% regardless of our experience. Um, and our experience last year likely would have led to it going up by more than that 14%. And we had a cap on the administrative fees were charging
um were being charged. It's just the the claims we don't necessarily have a cap on. So would that would that be the same type of a contract you would have as fully insured or would it be a cap on claim on whatever we call these monthly premiums too? If you're fully insured,
they would just charge us a premium and we would send the premium to them. But I'm talking about the increase in the second year of a contract. Would a would a fully insured have a cap on the premium increase, too? Uh, that would all be negotiable, but they they could
have a cap on. So, we could have negotiated it in our fully insured one, too. We we didn't at that time. Okay. Thanks, Superintendent M. Just one more piece of information for the board. Just so you're aware, there's a there's a Senate file right now uh looking at um a
statewide pool. It's a different way to look at this for all state workers, not just schools, with the theory of could that provide increased stability and maybe better predictability statewide. There are some states that do this. Um but it does take away local control in
that scenario. But a larger pool could spread kind of spread that risk and maybe maybe um save some money just you don't having as many brokers and third party administrators involved. So that there is a a Senate file this year. There's my sense there's it's not going anywhere this year and maybe in the
future, who knows? But it's out there. It's being discussed as another option um for state employees. Director Langenfeld. Thank you. as we think forward also uh the role of AON in these discussions I
think will be vitally important and I would assume that they will be monitoring can we expect them I'm assuming to monitor very closely what's happening out in the market what political changes have come forward so that they would be on top of it and
really bringing forward uh the design plan changes and things that could really support our our staff. I I think none of us would want to see what we're currently in in this reality right now and um looking forward to to really
hopefully uh get to a better place for our employees as well. So thank you for that members any further discussion. All right. Uh if not, members before us is the health insurance premiums rate proposal as
presented in appendix A. Is there a motion to approve the health insurance proposal as presented? Do we? Oh, or sorry, you said option A or B? Uh the recommendation option. I got you. Okay. As presented. Sorry.
Thank Thank you, Director Adet. Uh with a motion from Director Audet, do we have a second? Second. Uh thank you, Director Langenfeld. Is there any further discussion? Uh Director Simon. Thanks, Casey. As um as my wife is a teacher and our family participates in this
insurance program, I will be abstaining from the vote. Uh Director Aro or Coach Arco, apologies. All right, you're fine. Um so I just want to acknowledge this is a painful correction. Um, but I still do believe that the most wholesome way to
pay for this is just directly not to pull from the fund or the general fund or anything like that. So, um, I also, at least from the sound of it, seems like there's merit to being self-insured. So, while it's true that we're having a bad experience right now,
and I would be interested in seeing what the other option would look like, I don't want to have a possible knee-jerk reaction of saying, "Well, it's just bad because this is happening." It is unfortunate we're in this situation, but you know, I don't want to demonize the system if it's been working well for us in the past. So, just throwing that out
there. Thank you. Any further discussion? All right. Hearing none, would all those in favor say I. I. Any opposed say nay. With five in favor and one abstension, uh, the motion passes. Thank you so much for the presentation.
Thank you. Thank you, board. All right, board. Our last agenda item is to adjurnn. Do we have a motion to adjurnn? Thank you, Director Simon. Do we have a second? Thank you, Director Langenfeld. Um, all those in favor say I. I. I. Any oppose
say nay. Six in favor and zero opposed. We are adjourned at 7:20 p.m. Thank you.