Benecon explains how Keystone Central's self-funded school health plan works; stop-loss set at $100,000

Cathy Cook, a Benecon representative, told the Keystone Central School District finance committee that the district has participated in a Public School Health Insurance Cooperative (PSHIC) since 2009 and that the district’s stop‑loss per person is currently set at $100,000.

The PSHIC model, Cook said, pools claims funding from member districts into a single operating account, keeps each member’s accounting separate, and returns surplus dollars to members when the cooperative’s claims experience permits. “We do not give lasers,” Cook said, describing Benecon’s approach to avoid singling out and excluding high‑cost plan members from reinsurance coverage.

Cook walked board members through the cooperative’s layers: a member claims fund (the “green box”) that pays claims below the stop‑loss point; a spec‑share account contributed to by all members that pays a majority share of specific high‑cost claims above the stop‑loss point; and a reinsurance (stop‑loss) policy that covers the remaining portion. Benecon negotiates the reinsurance contract and administers the consortium; members choose their network carrier (Keystone currently uses Highmark), plan design and eligibility rules.

Cook said the cooperative’s stop‑loss point for Keystone was set by Benecon’s actuaries at $100,000 for the plan year and noted that the specific deductible is sized to the district’s membership. She described cross‑share and a cheap aggregate stop‑loss wrapper that together prevent the cooperative from asking individual members to add funds midyear. “You know what your maximum liability is, in April for your July 1 start date,” Cook said.

Benecon also discussed historical performance and risk. Cook said Keystone has received surplus returns in good years (she pointed to roughly $1.6 million returned across strong years) and that the district’s long‑term average annual increase since joining the program has been about 6–7.5 percent, depending on the period measured. She reported a stop‑loss loss ratio of about 92.6 percent and said Benecon prices reinsurance assuming an 80 percent loss ratio for the carrier.

Committee members asked about specific drivers of recent cost increases. Cook said catastrophic and repeated high‑cost claims are the primary drivers and demonstrated a multi‑year chart showing repeat claimants. She recommended spousal‑exclusion policies when spouses have access to other employer coverage, saying many districts that are part of similar consortia have adopted such exclusions.

Cook also described a currently contested case involving a retiree spouse on the district’s plan who is Medicare‑eligible but has not taken Medicare Part B; Benecon said the district’s current reinsurance arrangements require the district to continue covering that person’s claims and noted the spouse will remain on the district’s plan until the retiree turns 65 in December 2026. “We have to pay up until December 2026,” she said.

On program options, Cook contrasted fully insured, standalone self‑funded, and the PSHIC modified self‑funded model Benecon administers. She said fully insured plans collect premium without returning surplus and standalone plans can expose a district to “lasers” from stop‑loss carriers that carve out predictable high‑cost claimants. Benecon’s model, she said, returns surplus when claims are favorable and spreads certain high‑cost risks across the cooperative.

Committee members asked for additional detail, including a 10‑year snapshot of claims and a break down of employee versus dependent claims. Cook agreed to provide additional format options and dataset breakdowns to the district’s administration for follow‑up.

Ending: The committee did not take a formal vote on coverage changes during the meeting. Benecon left the committee with requests for additional data formats (10‑year trend, employee/dependent/spouse breakdown) and the district’s administration signaled they will meet with Highmark and Benecon to review those detailed figures before the next finance meeting.