As the East Baton Rouge Parish school system attempts for a second consecutive year to get a handle on how much it pays for employee health insurance, it is asking earlier for advice and feedback from employees affected by any proposed changes.
Superintendent Bernard Taylor has formed a 14-member “Advisory Group for Insurance” to help him sort through what is best to do. The group consists of active and retired employees, some with employee groups, some unaffiliated.
The newly formed group is set to meet at 10:30 a.m. Wednesday at the School Board Office, 1050 S. Foster Drive, and the school system is inviting the public.
To maintain the status quo, the school system is looking at increasing premiums across the board for all employees, active and retired, by an estimated 12 percent. The increases would kick in Jan. 1.
As a way of avoiding a big premium increase, the school system is once again considering hiring an outside vendor to handle supplementary insurance for Medicare-eligible retirees. Six companies — Aetna, Cigna, Hartford, Humana, Peoples and United Healthcare — have submitted proposals to take these retirees and handle their supplemental insurance through a Medicare Advantage plan.
Blue Cross Blue Shield, which administers the school system’s self-funded insurance plan, elected not to submit a proposal.
In a Feb. 20 memo, Catherine Fletcher, chief business operations officer for the school system, says moving retirees to a Medicare Advantage plan would mean “benefits that are not as rich as the EBRPSS plan, but such a move would help the budget.”
Last summer, Taylor proposed hiring Extend Health, a private company based in San Mateo, Calif., to handle a Medicare supplemental insurance plan for 2,700 retirees, a move that would have saved the district an estimated $8.7 million a year and that for some retirees might actually have been an improvement to their current coverage.
In the face of unexpectedly strong opposition, the School Board opted instead to raise monthly premiums for all employees in 2013, an average of 18 percent for active employees and about 32 percent for retirees.
Some retirees got what they wanted — to continue on the school system’s supplemental health insurance, to “stay in the group” as many of the retirees described it, and not be placed into the uncertain and changing world of Medicare.
In her Feb. 20 memo, Fletcher mentions two other money-saving alternatives:
- Join forces with other school districts to try to develop a larger insurance group.
- Give active employees a salary supplement that they could then use to find health insurance in the private market.
Fletcher, however, quickly walked back the last alternative, noting that the Patient Protection and Affordable Care Act of 2010, often shortened to “Obamacare,” would impose a $2,000 per employee penalty, adding up to $11 million, if the school system tried to do that.
The school system’s health care consultant, Mercer, has suggested that Obamacare alone will increase the school system’s expenses by $3 million in 2014 because of new fees and the requirement that employees who work 30 to 40 hours a week have to be able to join the employee health insurance plan.
Mercer has projected that the cost of employee medical coverage, both what the school system pays and what employees pay, will increase from a projected $85.3 million in 2013 to $92.1 million in 2014.
Mercer’s estimates, however, were far off the mark in 2012. In June, it projected the school system and its employees would spend almost $88.5 million that calendar year. The actual cost at the end of 2012 was $78.9 million.
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