Lafayette Parish officials warn insurance fund surplus is temporary; transfer from general fund masks shortfall

Lafayette Parish School System finance staff told the district’s finance committee on March 18 that a reported $4.9 million surplus in the district’s self‑funded group health plan reflects a prior transfer from the general fund and does not mean the plan is sustainably solvent.

The clarification came during a presentation on the insurance fund’s seven‑month and rolling 12‑month reports. Anthony Mouton, the district’s director of finance, said the district plans to budget a transfer of $6.6 million from the general fund for fiscal 2025–26 and that without prior transfers the fund would show a deficit.

Why it matters: The committee is setting budget assumptions for FY25–26. Whether the district must again use one‑time general‑fund money to shore up the insurance fund affects the board’s ability to pay for priorities such as proposed teacher salary increases and charter adjustments.

Mouton told the committee that “the general fund budget for next school year will have a $10,300,000 deficit,” and that the insurance fund itself “may have a $10,000,000 deficit” before a planned $6,600,000 transfer, which would reduce that gap to about $3,400,000. He presented the projected shortfalls as part of broader countywide budget pressures the committee must address.

Trish LeBouf, director of insurance and benefits, walked the committee through recent monthly reporting and cautioned that point‑in‑time numbers can be misleading. LeBouf noted the district’s per‑member per‑month health plan cost on one slide as $516.94 and said January results included timing items such as rebates and the seasonal pattern of deductible use that can temporarily lower claims. “This is just the January,” she said, urging members to treat the report as a snapshot rather than a final fiscal year result.

Consultants from Gallagher, the district’s benefits advisor, said they are preparing premium equivalents — a full cost estimate the district should use when setting employer and employee contributions — and conducting market checks of the third‑party administrator (TPA) and pharmacy benefit manager (PBM). A Gallagher presenter said the district’s current premiums are lower than the consultants’ current estimates of total expected costs and that the consultants were preparing a “tentative budget” figure near $69,500,000 in total plan cost for the coming year.

Committee members pressed for clarity about prior board actions. One member noted the presentation’s display of a surplus “is only a surplus because we’ve transferred money from the general fund,” and LeBouf and Mouton confirmed the transfer occurred to avoid a cash shortfall in the health plan this year.

District and consultant next steps include completing the TPA and PBM market checks, finalizing premium equivalents, and presenting possible plan‑design changes and pharmacy‑focused strategies intended to reduce long‑term costs. Staff and consultants said any premium changes or benefit design changes would require board approval.

Ending: The committee scheduled budget hearings through May and June; staff said they will return with final premium equivalents and recommendations in time for the board’s May budget adoption timeline so the board can decide whether to again use general‑fund transfers or pursue premium increases or other cost savings.