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Board defers decision on commercial group health renewal after Blue Cross 5% indication; staff appeals and offers self-funded option
Summary
District staff reported a 5% renewal indication from Blue Cross for the fully insured commercial group plan. Staff appealed underwriting over premium-funding and a Humira exclusion and proposed a self-funded alternative requiring a $3 million seed reserve; final action deferred to Oct. 9.
ST. MARY PARISH, La. — The St. Mary Parish School Board did not take final action Sept. 11 on the district's fully insured commercial group health plan renewal after benefits staff reported a 5% renewal indication from Blue Cross and said an appeal to underwriting is pending.
Mr. Perez, a district staff member presenting the renewal, said the carrier's 5% renewal would increase annual premiums by about $662,000 if accepted as indicated. "The renewal indication we received from Blue Cross is a 5% increase effective 01/01/2026. That amounts to about $662,000 in increased premiums," Mr. Perez said.
What staff reported and why they appealed
- Loss ratios and trends: For August the plan produced a favorable month; year-to-date the simple loss ratio was 85.2%, and when adjusted for expenses the presenter said it is under 94%.
- Drivers of the proposed increase: Mr. Perez said the proposed 5% increase is driven largely by prescription drug trends (which he said Blue Cross projects at about 12% annually) and medical trend (just under 10%).
- Grounds for appeal: Mr. Perez identified two specific items on which he appealed to underwriting: (1) the premium funding amount used in the carrier's calculation, which he said appeared to be underestimated by about $250,000; and (2) the carrier's failure to credit the plan for the planned Humira exclusion for 2026. He said Humira accounted for about $140,000 of this plan's current-year drug spend and that the exclusion should reduce next year's projected spend.
- Requested adjustment: Based on those items Mr. Perez said he had appealed to underwriting and hoped to see an adjustment to approximately 2.2% rather than 5%. He said he had submitted the appeal immediately after receiving the renewal indication and expected an underwriting response before the Oct. 9 board meeting, at which he will make a formal recommendation.
Self-funded alternative offered
Mr. Perez also presented a prepared self-funded proposal and offered to present the analysis to the insurance committee. He cautioned that moving to a self-funded plan would not produce immediate cost savings and would require an initial "seed" contribution of $3,000,000 into reserves. "Now should the board decide to go that route, it doesn't mean any immediate cost savings. It's gonna cost you the same, plus an additional seed contribution of $3,000,000, into the reserves," he said.
Board direction and next steps
Mr. Perez recommended deferring a final decision until underwriting responds; he said that it is customary for the board to act in October. The board did not vote on the commercial plan at the Sept. 11 meeting and will consider the matter at its Oct. 9 meeting after staff receives underwriting's response.
Speakers and questions
During the presentation a board member asked whether members on the Medicare Advantage plan had been blocked by some providers; Mr. Perez said the district had received calls in early years after switching carriers in 2019 but that outreach to providers resolved those issues and the district currently receives no ongoing provider-access complaints related to the Medicare Advantage plan.
No formal motion was taken on the fully insured commercial renewal at the Sept. 11 meeting; staff will return with underwriting updates and recommendations before the October 9 meeting.
