West Allis — District administration recommended that the West Allis-West Milwaukee School Board renew its group health insurance with UnitedHealthcare and adopt several plan changes intended to lower the insurer's proposed premium increase for 2026.
The administration told the board during an Aug. 25 financial stability and efficiency workshop that negotiated steps including raising prescription copays, reducing district wellness funding and eliminating a UnitedHealthcare nurse liaison would reduce the effective renewal from 18% to about 11%, an increase the administration estimated would total roughly $1.8 million in additional premium for the district.
District staff said the recommendation follows several months of underwriting and market outreach, and that the district received limited competitive bids in southeastern Wisconsin.
Board context: why this matters
Health insurance premiums are a substantial budget item for the district and affect employee paychecks and hiring costs. Administration officials said the board's decision on benefits influences the district's 2025-26 budget position and next year's labor-cost projections.
What staff presented
Representatives from the district and benefits broker Brown and Brown summarized plan experience and market options. Staff said the plan's loss ratio through April 2025 was about 105.1, with roughly $5.5 million in premium paid and about $5.8 million in paid claims. Large claims were concentrated: 14 members had more than $50,000 in paid claims through April and five members had more than $100,000.
Staff identified prescription drug costs as a major upward driver: overall paid prescription costs rose about 30% in the most recent 12-month comparison, while medical claims per-member-per-month fell about 6% in that same window. High-cost categories noted were specialty oncology drugs, musculoskeletal procedures with complications and increased behavioral health utilization.
Market outreach and negotiations
District staff said they requested fully insured proposals from Anthem, WPS and Network Health Plan as well as UnitedHealthcare. WPS declined to quote, estimating a roughly 45% increase; other carriers either offered higher increases or networks that would exclude major local providers the district's employees use. UnitedHealthcare, the incumbent, negotiated reductions during discussions and offered an 18% increase without plan design changes.
To reduce premium pressure, staff recommended three changes negotiated with UnitedHealthcare: increase prescription copays by $10 at each tier (example: tier 1 from $10 to $20), reduce the wellness funding credit from $750,000 to $550,000 (staff said $550,000 still covers the on-site clinic administered by Froedtert, physical therapy with ATI and the gym reimbursement program) and remove the nurse liaison position (valued by staff at about $164,000). Those steps, staff said, reduce the renewal to about 11%.
Self-funding analysis and risk
Brown and Brown presented a self-funding analysis showing a wide range of estimated costs versus fully insured pricing for 2026; the broker's modeled self-funded scenarios ranged from modest to materially higher cost depending on administrator contracts and stop-loss pricing. Staff noted that stop-loss quotes and precise self-funded pricing depend on near-complete claims data later in the year and can vary significantly.
Board questions and administration's next steps
Board members asked about the nurse liaison's day-to-day role (transition help, appeals, and periodic on-site presence at schools), the budget impact of the negotiated reduction (administration said moving from an 18% increase to the recommended 11% puts roughly $180,000 toward the district's 2026 budget target compared with a larger shortfall at 18%), and whether changes to copays could be targeted to brand-name tiers rather than generics. Staff said they had requested alternative Rx structures from UnitedHealthcare but that the insurer's current fully insured Nexus ACO plan designs limited available Rx options; staff also proposed additional employee education and clinic services to lower out-of-pocket costs where possible.
No formal board vote on the renewal occurred at the meeting; administration said it would proceed with the recommended renewal negotiation and continue to evaluate self-funding and market options for 2027.
Ending
The district scheduled continued discussion with benefits staff and the broker; administration said it would return to the board with final plan documents and pricing before any binding contract change.