St. Cloud Schools board approves carrier change, 11.54% medical premium increase

The St. Cloud Public School District Board of Education voted to approve the labor-management committee's recommendation to switch the district's self‑insured medical administration from HealthPartners to Blue Cross Blue Shield and to set an 11.54% increase to medical premiums for the 2025–26 plan year.

District executive director of human resources and general counsel Tracy Flynn Bow and benefits consultant George VanderWeed of 1Digital presented plan financials and the bidding results at the Aug. 6 meeting. Flynn Bow told the board the LMC made a unanimous recommendation to move carriers and to adopt the premium increase to cover expected claims costs.

Board members heard a multi-page financial review showing the plan’s projected claim spend, year‑to‑date actuals and reserve position. The district’s plan year runs October–September; through June the plan was running close to projections, with claims near $12,000,000 versus an expectation of $11,300,000 under the incumbent contract. The district’s internal service fund balance stood at about $3.4 million, roughly 22% of annualized claims; the administration says its long‑term target is about 35% (roughly $6 million).

VanderWeed said a primary driver for the carrier decision was differences in two‑year stop‑loss pricing: HealthPartners’ two‑year stop‑loss premium was presented at about $4.9 million versus a roughly $3.1 million figure from Blue Cross. The RFP process also produced offers from the Public Employee Insurance Plan (PEIP); PEIP proposals were rejected by the committee because their plan designs did not match the district’s and their price increases were substantially higher (presentation cited single‑rate increases of about 20% or 72%, and family‑rate increases of about 39% or 200%, depending on the PEIP option). Two carriers, UnitedHealth and Medica, declined to bid.

Under the recommended plan, the district would keep the current deductible structure (a $3,500 individual deductible and $7,000 family deductible) and retain HRA contributions (about $1,000 individual and $2,000 family). The recommendation also included moving the district’s flexible‑spending/HRA administration to HealthEquity, Blue Cross’s partner, to maintain a seamless claims experience.

The administration recommended setting premiums to cover expected cost rather than to rebuild reserves; Flynn Bow said staying with HealthPartners would have resulted in a premium increase “north of 19%,” while the recommended option holds increases to 11.54%.

Board members asked clarifying questions about communications to employees, the relationship between premium increases and pay increases, and the treatment of spouses who are both district employees (the “employee‑married‑to‑employee” benefit). Flynn Bow said the EME contribution arrangement is set in collective bargaining agreements and would need to be addressed at the bargaining table; the district has begun initial bargaining on the topic and informed bargaining groups of the board’s priorities.

Motion and vote: Board member Natalie Copeland moved to approve the LMC recommendation; Diane Fenton seconded. The board recorded unanimous votes in favor (Diane Fenton — yes; Al Dahlgren — yes; Natalie Copeland — yes; Scott Andreasen — yes; Shannon Hawes — yes). The board approved the carrier change and the premium adjustments. Flynn Bow also recommended a 0% premium change for the self‑insured dental plan (the dental fund balance is about $800,000) and noted life, disability and voluntary vision plans remain under rate guarantees.

What happens next: The administration will implement the change in third‑party administrator services and prepare open‑enrollment communications for employees that explain plan design, projected pay‑check impacts and the rationale for the procurement decision. The board did not direct any immediate changes to bargaining contracts; Flynn Bow said EME adjustments would be discussed at the bargaining table.

Speakers who appear in this account are identified by name and role as they spoke at the Aug. 6 meeting.