Board presented proposed health plan changes after committee flags $2.5M projected deficit; staff recommend higher deductibles and coinsurance

Washington County Public Schools officials told the board the district’s health care fund has deteriorated from a $20.3 million balance in 2020 to a projected $2.5 million deficit this fiscal year, driven by rising medical claims and drug costs. The healthcare committee recommended several plan design changes intended to reduce the district’s projected health fund liability and align costs with the district’s FY27 budget plan.

The proposal’s main elements: For the HMO (limited) plan the committee recommended increasing the individual deductible from $100 to $750 (family from $200 to $1,500), adding a 10% coinsurance on covered services after deductible and increasing the out‑of‑pocket maximum to align with the standard plan (individual up to $2,400). For the preferred provider (standard) plan the group proposed a similar deductible increase (to $750 individual/$1,500 family), introducing 10% in‑network coinsurance, and higher out‑of‑pocket limits. The health committee expects these changes to reduce plan cost roughly 4–6%, deferring an estimated $4–4.5 million in plan expenses based on Gallagher modeling.

Why it matters: District staff said $5 million was already added to the FY27 projection to blunt immediate pressure, but the fund’s multi‑year decline means additional plan design adjustments may be needed to prevent larger general fund or service impacts. Board members emphasized balancing pay increases and benefits preservation—particularly given the district’s on‑site clinic (Marathon Health), which offers no copay for visits and can reduce emergency department use.

Board questions focused on specifics: how coinsurance differs from copays, the clinic’s scope (no employee costs at the clinic; labs billed at negotiated rates), neighboring counties’ approaches (some use coinsurance; many lack a district clinic), and whether raising urgent‑care copays would shift usage toward the on‑site clinic. Staff said urgent‑care copay increases were unlikely to materially change costs and that expanding clinic hours was a parallel strategy.

Next steps: Staff will bring the plan design package as a business item to the board at the April business meeting so it can be included in open enrollment in May.