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Board approves 3% increase to employee medical premiums, approves insurer change recommendation
Summary
After a benefits presentation, the board approved a 3% increase on medical insurance premiums and heard staff recommend switching plan administration to gain pharmacy rebate flexibility and better reinsurance pricing; the board discussed telehealth savings.
The Brainerd School Board approved a 3% increase to the district’s self-insured medical insurance premiums at its regular meeting Tuesday and heard a recommendation from the district’s benefits consultant to transition plan administration to a new vendor to improve reinsurance pricing and rebate returns.
Representatives from National Insurance Services (NIS) summarized the district’s claims experience and recommended a modest premium increase to address medical trend and administrative costs. "When we trend those claims forward ... our recommendation at NIS is a 3% increase on our medical insurance premiums," said Marci Lord of National Insurance Services.
NIS explained the district’s current loss-ratio metrics and stop-loss protections. The consultants said the district’s plan performs above their target loss ratios; they recommended a 3% premium increase rather than fully funding an actuarial trend in part because competitive quotes—along with a vendor change—would offset costs. The consultants proposed transitioning to a plan administration arrangement (presented as HealthPartners/Crumpdale in the bid materials) that would provide more favorable reinsurance terms and allow the district to recapture a larger share of pharmacy rebate dollars.
Board members pressed for details about who would bear higher premiums and whether retirees or employee groups would be affected; consultants said contribution splits depend on group contracts but that the total premium dollar increase affects both district and employees proportionately. Officials said the district has about 818 employees on coverage and about 100 retirees still on the plan.
The NIS presentation also highlighted use of a telehealth service (Healthiest U), which the consultant said redirected roughly $316,000 in claims away from more expensive settings and reported roughly 860 total registrations among employees and dependents to date. "Instead of someone going to urgent care under our medical plan benefits, they're able to receive the care that they need ... and they're able to get a prescription," an NIS representative said.
Director Donnellinger moved approval of the revised premiums and the board approved the change.
Staff said the district will present final contract documents and implementation details and that changes take effect at the plan renewal date. The board also discussed use of OPEB funds for retiree costs and noted that catastrophic specific stop-loss protection is set at $300,000 per claim under current stop-loss arrangements.
