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Board discusses rising health-care costs and whether to keep EPO option; no immediate decision
Summary
Trustees heard an update on the district—s health-care trust showing mixed funding ratios across plans and discussed the higher-cost EPO option, which staff said other districts are dropping; administration will analyze renewal options and present recommendations at February or March meeting.
District finance staff presented the board with a mid-year financial and health-care trust update at the Jan. 27 meeting, highlighting that total medical claims were running at a slight deficit for the plan year and that the EPO plan in particular showed a high funding deficit.
The administration reported the health-care trust—s assets (including investments) were a little over $3.9 million and that overall medical claims were running at a funding ratio of about 104%, a deficit of approximately $344,000. The EPO option was running at a 146% funding ratio with a deficit of roughly $818,000; about 20% of employees were enrolled in the EPO. The PPO showed a 112% funding ratio with a deficit of $321,000, while the HSA option showed a 76% ratio with a surplus of $795,000.
Staff said the district will likely see a significant health-insurance cost increase in the next plan year and that the board would need to discuss options for absorbing the increase. Administrators reported they are analyzing whether to eliminate the EPO option, noting some other districts have already removed EPO choices. Board members and staff said June/renewal decisions would likely come in February or March when additional analysis from consultants (Locked-in) is complete. Staff estimated a plan-year premium increase of roughly 8.5% as a working figure.
No formal action was taken; the board directed staff to continue the financial analysis and to return with a specific renewal recommendation for board consideration at an upcoming meeting.
