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SAU 24 board authorizes pursuit of self‑funded health plan contingent on feasibility study and contract resolution
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Summary
SAU 24 trustees voted to allow staff to pursue a shift to a self‑funded employee health plan, pending a favorable feasibility study and settlement of bargaining negotiations; the board discussed stop‑loss design, potential savings, transition supports and vendor optics.
SAU 24 trustees on April 6 authorized staff to move forward with plans to establish a self‑funded employee health insurance plan, contingent on a successful feasibility study and resolution of collective bargaining negotiations. The authorization permits staff to finalize vendor negotiations and plan details only if those two conditions are met.
Jackie (staff member) told the board the self‑funded option is “substantially the same” as previously considered alternatives and that the SAU can operate as a single sponsoring entity. Jackie described the plan’s stop‑loss structure: a specific per‑person deductible of $100,000 (the district would cover the first $100,000 of an individual’s claims, with stop‑loss coverage reimbursing excess) and an aggregate attachment that staff illustrated with an example of roughly $5,100,000 in expected total claims, above which aggregate stop‑loss coverage would begin to pay. Jackie also cited an illustrative insurer aggregate cap in the discussion of about $2,000,000 and a sample stop‑loss premium figure staff reported at roughly $1,000,000 for the coverage levels under consideration.
The board pressed for clarity on how claims are counted and how savings would be recognized. Staff emphasized that any budgetary savings would be realized at the district level as lower budgeted spending (not an immediate cash rebate), and that claims run‑out means final savings would not be clear at fiscal year end. Jackie said districts would be charged back weekly based on a formula tied to subscriber counts and plan types, and that districts would retain authority to set local cost‑sharing with bargaining units.
Trustees discussed transition supports for members, including time‑limited protection for preauthorized care during the changeover and a member liaison to help with prior authorizations and appeals. Jackie described a proposed appeals path in which members could pursue existing administrative appeals and — if unresolved — a limited, anonymized final appeal to the SAU board for cases that met narrow, documented medical‑necessity criteria.
Members raised procurement optics and possible conflicts of interest around a local consultant (referred to in the meeting as Zach and his company). Board members asked legal staff to review whether involvement would create self‑dealing; the board heard that Zach resigned from a role linked to the project to reduce appearance concerns. Several trustees said legal advice would be required to confirm whether any conflict remained.
Chair and trustees emphasized the plan is not final: the board’s authorization was explicitly contingent on receiving a favorable feasibility study and on resolving outstanding negotiations with bargaining units. The motion passed by voice vote; no roll‑call tally was recorded in the transcript. If the feasibility study and negotiations permit, staff indicated the planned implementation timing would align with a July 1 plan year start, with detailed contract approvals and policies to come back to the SAU board for formal action.
Next steps: staff will return the feasibility study to the board, obtain any required legal guidance on vendor relationships, and report back on bargaining‑unit negotiations before any binding contract is approved.
