One of the challenges faced by the School of the Osage Board of Education and administration is how to deal with ever-increasing health insurance costs.
School of the Osage is self-insured and manages an escrow account from which it pays medical and prescription costs of its employees. The last two years, the board has supplemented the escrow account twice for a total of $1 million.
Superintendent Brent Depeé told the board Monday night that it is time to be proactive in solving the problem. He is proposing formation of a benefits committee to consider several options he has developed. Last year, the district increased its monthly premiums by $25, which helped curb the deficit spending by approximately $260,000.
“We’re not bleeding as badly as we were, but we’re still headed in the wrong direction,” he told the board.
Health care expenditures average about $155,000 a month for the district, while revenues generated through employee premiums paid by the district and school district contributions average about $135,000.
“I want to be proactive, but I don’t want to rush into things and make drastic changes,” Depeé said, explaining he wants to re-coup about half of the projected deficit in the next year. He wants to implement between $120,000 and $150,000 worth of savings, and then re-evaluate the district’s insurance plan next year at this time.
To do that, he said, employees need to get healthier and the school district needs to fine-tune its health insurance system. Changing the prescription plan is one way to cut costs.
At Osage, employees, families and retirees filled 4,746 prescriptions last year, about 30 percent higher than the national average. The net cost to the district for prescriptions was $488,608 last year, while the national average was $210,105.
The average prescription co-pay at School of the Osage is about $12 per, while the national average is $17.50.
Depeé is suggesting three areas of potential savings:
•Changing pharmacy benefit managers — $40,000
•Change prescription co-pay structure — $43,000
•Raise premiums by $10 month — $36,000
He said the options are not recommendations because he believes the changes need to be a collective decision. A benefits committee would have the opportunity to study the information before making a recommendation to the board.
He hopes that will happen by the April board meeting with implementation in May.
One of the ideas presented by the board was offering Health Savings Accounts (HSAs), which require high deductibles but also allow employees to set aside pre-tax funds that can be used to cover out-of-pocket health care costs.
“We’ve had a good plan and it has served the district well, but it’s time we look at some other ideas,” the superintendent suggested.
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•The board learned that student enrollment is at 1,826, up 26 students from a year ago. Enrollment, like the economy, has been flat in recent years, though school officials anticipate a steady increase in the next few years. Class sizes range from about 120 to 160.
•Tentatively set summer school dates of June 3-20, with a four-day schedule similar to last year. Some high school students may have to attend an additional week to meet credit objectives.