High-deductible health insurance may be in the offing for employees of the DeForest Area School District.
“We’ve tried to make small little changes, but that is no longer sustainable,” said Director of Human Resources Nate Jaeger. “The status quo is no longer an option.”
Jaeger gave a presentation on the preliminary recommendation by the Insurance Advisory Committee at the April 8 school board meeting. Staff presentations on the matter have been ongoing, and the school board is expected to consider the plan again and vote on it at its next meeting on Tuesday, April 22. Open enrollment is May 5-31.
Increasing health insurance premiums are forcing school officials to consider the high-deductible plan. Jaeger said the district does have a history of large amounts of claims.
“We’re expensive to insure,” said Jaeger.
Jaeger said school officials have known they’ve had to consider the high-deductible option for the last few years. High-deductible options represent new forms of health insurance engagement, according to Jaeger.
The district is not proposing a change to insurance providers. It is sticking with Quartz. If the Insurance Advisory Committee’s recommendation is approved by the school board, employees will be able to choose a high-deductible plan with a health savings account ($49.47 a month for single employees, $112.31 a month for families), a $250/$500 health maintenance organization ($88.88 per month for singles, $263.62 a month for families) or a $250/$500 point of service plan ($149.84 per month for singles, $402 per month for families).
The Quartz high-deductible health plan with an HSA is the proposed new option for employees., according to Jaeger. On the surface, the $3,000 deductible for singles and $6,000 deductible for families may seem intimidating, said Jaeger.
However, the school district is proposing to make contributions back to employees’ HSAs that would almost cover the deductibles by 100 percent. For singles, the amount would be $2,750 and for families, it would be $5,500. The HSA money could be used to pay out-of-pocket expenses, as families would have a net deductible of $500, with a $250 net deductible for singles.
The district would benefit from lower premiums, as HSA donations would become a fixed cost.
“We’re taking a variable that’s increasing at a significant rate and decreasing it,” said Jaeger.
District premiums have risen since 2010, going from $13,736 per employee that year to $17,327 for families in 2018 and $6,723 in 2010 to $7,633 in 2018 for singles. During the same time period, employee premiums have also jumped from $1,526 in 2010 to $1,925 in 2018 for families and from almost nothing in 2010 for singles to $848 in 2018.
By design, the high-deductible plan lowers monthly premiums, creates a fixed expense for the employee HSA deposit and it encourages consumerism, according to the Insurance Advisory Committee’s report. Under the high-deductible plan, preventive care would be covered at 100 percent, and 100 percent of expenses would go toward the deductible. There would be no medical copays, no medical coinsurance and no prescription copays. Everything that is in-network would be covered at 100 percent after the deductible is paid.
Employees can contribute to HSAs up to the Internal Revenue Service maximums and redirect enough money to pay their net deductibles.
There are advantages to having HSAs, according to Jaeger. Funds can be used for qualified medical expenses. Contributions, donations and interest are not taxed and unused funds roll over every year.
“It’s your money,” said Jaeger. “If you leave the district, you take it with you.”
Jaeger added that an HSA can be used as an investment for retirement, as well.
Also, expenses do not expire. Those with HSAs can submit expenses incurred any time after becoming eligible to participate in the HSA.
Jaeger cautioned that those covered by another health plan, including flex-spending accounts (FSA), are not eligible for an HAS deposit or contribution. However, the district will continue offering FSAs.
Board Member Keri Brunelle asked about the feedback to the proposal. Jaeger said thus far, it’s been positive.
“It’s been a challenging process, trying to explain things without having all the details,” said Jaeger. “I can relate to employees who have felt anxious about the unknown.”
Some teachers have pushed back against the high-deductible proposal.
School Board Member Jeff Miller said he appreciated the committee’s thoughtfulness and that it had a cross section of employees participating in its deliberations.