Insurance Committee May 2013

The District Health Care Committee met on Tuesday May 14, 2013. The Committee is charged with the management of our plan. All District employee groups are represented at these meetings and a consensus approach is used for decision-making.

United Healthcare gave the annual report for the plan year, January 1, 2012 through December 31, 2012. According to the data, the major drivers raising the overall cost of the plan are the high cost claimants. The definition of high cost claimant is an individual that has incurred over $50,000 in that year coverage year. Unfortunately we have had several claims for very serious illnesses. Less than a handful of claims account for nearly $3M in billings. It’s important to remember that our insurance plan is self-funded so those costs are bore by the district. If those types of claims are factored out, our experience was more in keeping with past costs and overall market trends.

In order to improve the plan, we also look at what seems to help lower the cost. Things we are doing well include using UHC Premium Providers, participation in wellness exams, and use of Tier 1 prescriptions whenever possible. When we were able to take a look at the experience for the first quarter in 2013, our claims experience is looking much more in line with traditional expenses and that will help lower the rising cost of the plan.

We continue to focus on providing the best opportunity for quality healthcare at the best cost. However, we are also looking forward to the future and how to delay or offset the possibility of incurring what is commonly referred to as the “Cadillac Tax,”  as part of the Affordable Care Act. In the next few years, we could see an additional federal tax to our income because of the rich benefits we currently receive through the plan as it exists today.  We need to consider these future realities when looking at our plans. The Committee is reviewing several design changes within our plans, as it does on an annual basis, in order to avoid the large penalties we face beginning in 2018. The current estimate of this annual tax for U46 stands at approximately $3M.

Please continue to use the Health Care bulletins from HR and the UHC website to be an informed health care consumer.

– Ken Kubycheck, BHS

Leave a Reply