Board briefed on health insurance shortfall; district to raise employee premiums and use reserves

Germantown School District leaders told the board Tuesday they will increase employee health insurance premiums and modify plan cost sharing to stabilize a self‑insured benefits program strained by rising medical and prescription costs.

Staff said the district has not materially changed plan contributions in more than a decade and now faces higher claims, especially for specialty medications. For fiscal year 2025–26 the district proposed a 5% increase to employee premium contributions, added employer support of roughly $800,000 from the general fund and will apply about $1.2 million of reserves as a cushion for claims.

Benefit staff outlined changes to prescription drug cost sharing: the plan will move to percentage‑based copays for specialty medications with a cap (staff described specialty drug cost sharing as 20% with a maximum of $200 per prescription), while generic and brand copays will also be adjusted. Staff noted that pharmacy costs represent a large share of plan expenses and that the district will continue to use a vendor to pursue quarterly pharmacy rebates.

The budget presentation projected roughly $8.1 million in revenues and a similar level of expenditures for the health fund, reflecting the employer contribution and anticipated rebates. The district also budgets $540,000 to continue operation of the employee health and wellness clinic, which staff said has averaged 88% utilization and 727 visits to date and helps reduce time away from work.

Board members acknowledged the difficulty of balancing benefits affordability with recruitment and retention needs. Staff said the changes may not be the only adjustments required in future years and emphasized continued monitoring of claims, rebates and utilization.

No final adoption vote was required at the work session; staff will bring formal budget documents for board action on the regular meeting agenda.