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Elmbrook staff outline 2025 benefits strategy; UMR TPA renewal, tiered network and screening changes considered
Summary
District staff recommended renewing the UMR third‑party administrator contract and presented three benefit strategies to close a budget gap: a Nexus ACO tiered network, expanded complete physical exams, and a specialty pharmacy carve‑out. Estimated annual savings range from hundreds of thousands to about $1 million depending on adoption and utilization shifts.
Elmbrook staff presented a multi-part approach to close a projected $1.5 million gap in the district’s employee health plan and keep long-term benefit costs manageable. The board heard a one-year TPA renewal recommendation and a slate of options for the 2025 benefit strategy.
Pam summarized the TPA renewal: UMR (a wholly owned subsidiary of UnitedHealthcare) manages the district’s self-funded plan. The renewal effective 09/01/2024 includes a pre-negotiated administrative fee increase of 4.2 percent; Pam said total spend for the TPA is $380,000 with wellness credits reducing the district’s net cost to $355,000.
For plan changes, staff and the benefit consultant outlined three priority proposals:
- Nexus ACO tiered network: Create a narrow tier‑1 network (e.g., Advocate Aurora, Froedtert) that would keep deductible and out‑of‑pocket levels unchanged for employees using tier‑1 providers, but raise costs for those who continue to use out‑of‑network providers. Administration estimated a potential savings of about $1,000,000 per year if roughly 30 percent of 2023 spend shifted into tier‑1 providers.
- Enhanced complete physical exams and age/gender screening requirements: Expand the district’s existing programmatic physical exam requirement with targeted screenings (colorectal, mammogram, PSA, cervical, skin) to catch high‑cost conditions earlier. Staff projected $300,000–$500,000 in savings over 2–4 years by avoiding large future claims.
- Specialty pharmacy carve‑out: Move some high-cost specialty drugs from the PBM to a specialized manager (OptiMed) while excluding chemotherapy drugs, with projected savings between $400,000 and $1,000,000 per year.
Board members asked about disruption for employees who would need to change providers under a tiered network and whether staff would be offered alternatives or financial offsets. Pam said the district tries to limit disruption and that many employees already use the proposed tier‑1 providers; the consultant estimated about a 30 percent disruption in provider alignment if the network is implemented. The personnel committee will review the options and return recommendations to the board in July.
Provenance: TPA renewal (introduced SEG 2248–2279); 2025 benefit strategy presentation and Q&A (SEG 2313–2710).
