District reviews self‑insured health plan vs. fully insured options; current self‑funding remains viable with some cost‑containment wins

The committee heard a detailed review of the district’s employee health plan options from the district’s benefits team and external insurance consultants.

Consultants explained the difference between fully insured (monthly premium paid to an insurer that assumes the risk) and self‑insured models (district assumes claim risk and pays claims; the district currently purchases stop‑loss protection). Benchmarking data placed the district’s funding/premium near the midrange for similar Wisconsin districts and somewhat favorable compared with many fully insured options, staff said.

Consultants reviewed the pros and cons of each approach: fully insured plans provide fixed monthly cost and less administrative work but reduce district control and prevent the district from keeping rebates and savings; self‑insured plans offer flexibility, rebate capture and additional cost‑containment levers, but require active administration and risk-management (including stop‑loss insurance). The district’s current specific stop‑loss attachment point is $275,000 per member with an aggregate layer and an aggregating specific deductible that reduces premium costs, staff said.

The consultant reported five‑year claim trends with notable year‑to‑year variation: higher claims in the most recent full fiscal year caused a one‑year increase, but the plan was trending lower through the current plan year (at the time of the presentation, through four months the consultant said paid claims were down roughly 17% year‑over‑year and including January data the decline was greater). The vendor expects several cost‑containment programs to produce additional savings in the current year (alternate drug sourcing and high-claimant assistance), estimated together at roughly $575,000.

Consultants modeled a one‑time run‑out cost if the district were to convert immediately to a fully insured plan (the run‑out for medical claims would be paid after plan closeout), and they compared projected multi‑year costs: a fully insured conversion could show first‑year savings with some carriers but, depending on assumptions, could be more expensive than staying self‑insured over a longer horizon. The consultants recommended continued evaluation but cited current advantages to staying self‑insured while accelerating cost‑containment work.

Ending: District staff said they will continue to monitor claims, implement cost-containment programs and review the market at each renewal; no immediate change of plan structure was proposed.