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Pulaski school leaders say insurer concessions and plan changes put health fund back on track; reserve policy recommended
Summary
School leaders reviewed RFP responses and said renegotiation with Anthem and modest plan-design changes (a $500 deductible on the high plan and raising the HSA deductible to $2,000) reduced the renewal cost and put the fund near break-even; consultants recommended adopting a formal reserve policy.
Rob Graham, superintendent of Pulaski County Public Schools, told board members an outside consultant and one insurer negotiated sharply lower renewal costs after the district received three RFP responses, including Anthem and two proposals with Jefferson Health Plan reinsurance. "Innovative Insurance and Sam have been fantastic," Graham said, praising the negotiation work that produced meaningful reinsurance relief.
Sam, the school system’s insurance consultant, said Anthem’s initial renewal proposal had been roughly an 18% increase. After using competitive bids as leverage and pressing Anthem on reinsurance, he said Anthem produced successive revised proposals and ultimately reduced reinsurance charges by roughly $560,000 compared with its original request. "I think I can get the reinsurance," Sam said of his follow-up negotiations.
Why it matters: The reductions, plus plan-design changes the committee agreed to, moved the account from a projected loss toward a small surplus and restored the prospect of rebuilding reserves. The committee approved adding a $500 deductible to the district’s highest-tier “key care” plan and raising the health-savings-account (HSA) deductible from $1,700 to $2,000 for individuals (family non-embedded deductible now totals $4,000 for dependents under that design).
What the consultant and staff told trustees: Sam recommended a reserve policy to define a minimum and maximum balance target, noting industry guidance ranging from three to four months of claims (an estimated $3–$4 million for this program) to a more conservative eight to ten months that would give the district flexibility during rate shocks. He told trustees a typical actuary rule of thumb is three to four months to cover run-out; he prefers eight to ten months to buffer against shocks.
Staff also explained HSA mechanics and employer contributions. Morgan said the employer contribution to HSAs would be $1,000 for single coverage and $2,000 for family coverage per year; Sam and Morgan described HSAs as tax-advantaged accounts that roll over and can be invested once a balance threshold is met. District leaders agreed that shifting enrollment toward the HSA option — while educating staff about long-term benefits — can reduce premium pressure over time.
Claims and projections: Sam reviewed claims history and called out two drivers of high prior-year costs: (1) several very large claims and (2) lasers (case-by-case additional charges or surcharges for specific members). He noted that a spousal-exclusion the district implemented last July substantially reduced the number and cost of large claims this plan year, changing large-claim counts from prior-year levels (for example, prior-year large-claim totals were higher; this year, Sam reported 65 large claims totaling about $3.6 million with 13 spouses generating about $830,000).
On premiums and timing, Morgan and Sam clarified that several figures in the packet were year-to-date collections and that when annualized they produce different projection scenarios (staff cited a commonly referenced projection near $13.6 million, with alternative annualized calculations ranging higher depending on enrollment changes). Sam cautioned projections can change if additional high-cost claims emerge before the plan-year end.
Decisions and next steps: The committee verbally agreed to the deductible and HSA changes and discussed directing up to a 10% allocation into reserves if claims remain favorable; Sam offered to draft and share a reserve-policy template the district can use with the county (the schools’ reserves are housed with the county). Sam also said he would follow up with Anthem to confirm prior-year claim handling and the absence of lasers in the coming renewal. No separately recorded formal board roll-call adopting those precise plan-design changes appears in the transcript beyond the committee-level agreement described during the session.
The meeting closed with staff and Sam agreeing to finalize renewal details and to circulate a draft reserve-policy template for county and school review.
