JEFFERSON — Jefferson school officials are looking at switching insurance companies to avert a 22-percent rate increase.
Laura Peachey, director of business services for the School District of Jefferson, said that the issue was raised in a preliminary fashion before the board of education last month and likely will come up for a board vote at its Oct. 14 meeting.
The district’s insurance is up for renewal as of Jan. 1, 2020. Planning ahead, the district put its insurance plan out for bid a few months ago.
In the past year, the district had recorded a 154-percent medical loss ratio, meaning that premiums received were less than claims paid out.
That loss to the insurance company is offset since the Jefferson employees were pooled with tens of thousands of other members across the state.
However, that high medical loss ratio would mean a big bump in costs if the district continues with its current plan.
Peachey said that the district received a bid from its existing insurance company, WCA, that included a 22-percent rate increase, which would mean a bump in health insurance costs to the district of some $600,000.
That’s well outside the district’s budgetary parameters, Peachey said, so the district sought alternatives.
Of these, Quartz (formerly called Unity) came in as the most economic option. This company offered a package that would entail a 9.45-percent increase over the premiums employees are paying now, with an 8-percent cap on increases in 2021 and a 9-percent cap in 2022.
The district also considered bids from WEA, Anthem, WPS, ETF, Dean and GHC, as well as self-funding, but all of these options were discarded for coming in too high, being too risky or being declined by the company the district sought out.
District planners advocated the Quartz plan, noting that most of the medical providers that district employees already use are considered “in-network” by Quartz.
Aurora (the Summit hospital) is not considered “in network” by Quartz, but that only represents 5 percent of district claims, Peachey said.
Mercy (the Janesville hospital) still would be considered “in network.”
Dean providers already were being phased out under the district’s existing plan, the business director said.
Some of the biggest changes to the district’s insurance plan under Quartz include:
• Some of the medications would be different, as each carrier has different approved meds for specific conditions.
• Under behavioral health, Quartz requires providers to be “in network,” whereas the district’s old plan did not. However, the Quartz system has several options under this category, while the old plan really didn’t have any.
• Acupuncture is covered under Quartz, whereas it wasn’t under the district’s existing plan.
• Bariatric surgery is covered under Quartz, whereas it wasn’t under the district’s existing plan.
• Under the Quartz plan, hearing aids would be covered for adults only, as compared to WCA, which covers hearing aids for adults and children.
The district’s insurance committee researched the issue and supported the Quartz plan.
Deductibles for employees would not change under the recommended plan.
“We had budgeted for an 8-percent increase, so this is a little higher,” Peachey said.
However, the business director said, this increase over expected health insurance costs would be offset by other areas of the budget.
“An increase of 22 percent (under the district’s existing plan) was well out of our budget range,” she said.