Finance committee recommends keeping Key Care for Lynchburg City Schools employees

The Lynchburg City Schools finance and facilities committee voted to recommend that the full school board keep the district's current Key Care health insurance plan rather than switch to HealthKeepers, following discussion of employee premium changes, provider network differences and projected district savings.

Committee members approved the recommendation by voice vote after a motion to stay with Key Care was made and seconded. The committee directed staff to continue monitoring claims and to explore market options for the next plan year, including working with broker Mark 3 and soliciting bids as appropriate, before the board makes a final decision.

Why this matters: Health plan choice affects both pay-period costs for employees and multi‑million‑dollar claim funding for the district. At the meeting, staff and the district's broker outlined that HealthKeepers could reduce the district's projected claims-related costs by roughly $500,000 in the coming plan year, while employees would see only small monthly premium differences but could face narrower provider access under the HealthKeepers network.

During the discussion, a benefits consultant, Heath Thomas of Mark 3 Employee Benefits, explained the distinction between premiums and claims. "The vast majority of the 17 or so million dollars that you're spending annually is in claims," Thomas said, adding that a shift to HealthKeepers reflects differences in provider reimbursement discounts that could lower the district's claim spend. He told the committee that about 98% of providers currently used by employees would be in the HealthKeepers network and that roughly 2% of providers — concentrated in areas such as physical therapy and chiropractic care — could initially be out of network. Thomas said that represented about 0.3% of total spend in the most recent year.

Committee members raised concerns that HealthKeepers moves the plan structure closer to an HMO from a PPO, potentially reducing employees' choice of doctors and causing longer waits for some services. One committee member said the minor monthly savings for employees "isn't worth" switching plans if it meant losing current access and continuity of care. Another member said the district should begin exploring alternatives now to avoid a rushed choice next fall.

Budget context presented at the meeting shows the district budgeted $16,862,720.73 for the current year health program; staff said the district's full 12‑month projected costs for the coming plan year were above that figure under both plan options. Staff explained that the roughly $500,000 projected savings from HealthKeepers is against projected future claim costs, not an immediate reduction to funds already spent.

The committee's recommendation is advisory: the finance and facilities committee will forward the recommended plan to the full Lynchburg City Schools board for a final vote. Committee members also agreed to keep closely monitoring claims data if the district remains on Key Care and to ask the broker to put a market solicitation on the calendar for the next plan year.

The committee meeting closed with a direction to add the recommendation to the full board consent agenda for consideration and with staff noting they will coordinate any necessary agenda postings and procurement steps with the city and the district.