By Helen Wilbers
Fulton Public Schools’ Board of Education voted Wednesday to leave the school’s old model of health insurance behind.
Following in the footsteps of Callaway County’s three other school districts, FPS has joined a consortium.
“We’ve been self-funded since 2000,” Superintendent Jacque Cowherd said at Wednesday’s meeting. “It’s been up and down.”
Lately, it’s been more down than up. Over the last few years, a series of expensive claims have depleted the coffer to such an extent that a 28 percent increase in funding would been needed to replenish it. The current plan was costing the district $532 per month per employee.
“If the board of education had elected to maintain the current stand-alone, self-funded insurance plan, the cost would be $680 per employee per month,” Cowherd said.
The district’s benefits committee agreed it couldn’t be done without “undue hardship” to employees.
However, district leadership didn’t want to give up the self-funded model entirely, because it avoids certain expenses inherent to insurance models subject to the Affordable Care Act.
Thus, the move to a consortium. The district voted Wednesday to join the Missouri Educators Unified Health Plan, becoming the 118th school district to do so. Its financial risk is now spread among about 13,000 members, rather than a few hundred employees.
“We’re still self-funded, just in a much larger group with more stability,” said Don Tatman, the district’s insurance consultant.
Other districts in the county have also made the switch. North Callaway R-1, South Callaway R-2 and New Bloomfield R-3 are part of the Mid-Missouri Educational Benefits Group, a separate consortium which comprises about a dozen school districts.
“Insurance pricing and coverage has been all over the place the last few years and has dramatically had changes in both those areas over the last three to four years,” explained Kevin Hillman, superintendent at South Callaway. “Many schools that were in self-funded plans have been looking for insurance groups that provide more persons as a buffer to claims.”
Sarah Wisdom, superintendent at New Bloomfield, voiced similar reasons.
“It’s done wonders for us,” she said. “The huge advantage is that you’re spreading out the numbers. If we have a bad year — a premature baby born or cancer — if we were privately owned, we could see a significant spike in our rates next year. In a consortium … those claims become easier to absorb.”
The stability has given New Bloomfield R-3 the ability to pay for the entirety of its employees’ insurance, she added.
“We’re very proud of that and our board has really stood behind the idea that that’s something that’s important to us,” Wisdom said.
Cowherd said FPS did reach out to MMEBG, but the group “did not respond to our request for coverage.”
That was a common story, Tatman said.
“Some (consortia) declined to give us a quote this year based on our claim history,” he said.
Of the quotes FPS did receive, MEUHP came out on top for a couple of reasons.
For one, the consortium is large, with more than 100 districts offering stability, Tatman said. Also, the cost to the district is manageable and may drop over time.
The board of education voted Wednesday to cover a basic plan for employees at a cost to the school of $501 per employee per month — a $31 monthly decrease. Cowherd explained employees may also opt to pay for a more-extensive plan at an added cost of $95 per employee per month — more than the previous cost of $40 per employee per month.
Cost to school districts under the MEUHP is based on the level of risk the district poses to the consortium. Districts whose employees are unusually accident-prone or unhealthy are enrolled at Tier 5. The Fulton School District, whose employees recently have made a higher total of and more expensive insurance claims than average, was made an offer to enroll at Tier 4, which costs 5 percent less than Tier 5. The tiers range all the way down to Tier 1 at 5 percent intervals.
Each year, when the district’s agreement with MEUHP is renewed, the district may move up or down one tier.
“Groups that are healthier than average will object to paying average rates,” said Drew Beaugard, a senior regional director for MEUHP. “This allows us to hang onto and attract healthier groups.”
The worst-case scenario for FPS would be to move up to Tier 5 in July 2020, paying 5 percent more.
“There is no Tier 6, and you won’t get kicked out,” Beaugard added.