Washington School District staff outline move from fully insured plans toward self-funding, propose spouse surcharge as an option

Consultants from GBS Benefits told the Washington County School District insurance committee on April 12 that the district can lower long-term benefits costs by moving from its current fully insured arrangement to a self-funded plan and by steering employees toward lower‑cost providers and plan designs.

Scott Stewart, senior consultant with GBS Benefits, said the firm is recommending a phased, five‑year approach with an initial conversion effective Aug. 1. "To do that, that's gonna take a fair amount of education and it's gonna take a fair amount of implementation meetings," Stewart said. He described immediate savings the district could capture by eliminating the fully insured risk charge and receiving pharmacy rebates directly, and by lowering administrative fees under a self‑funded arrangement.

The consultants laid out a funding continuum that ranges from fully insured (current state) through level‑funded and self‑funded with bundled administration, to carve‑outs for stop‑loss reinsurance and pharmacy benefit management, and more aggressive approaches such as reference‑based pricing. "As we move from left to right, you're gonna take on a little more risk and we're gonna have a little more reward potentially," Stewart said.

GBS provided two underwriting scenarios the committee reviewed: one that applied an expected funding level of about 14.5 percent and a second, more conservative scenario near 18 percent excluding pharmacy rebates. The firm used roughly six months of vetted claims data along with older records from prior carriers…