Pinellas school employee health insurance tweaked as possible cost-savings
The Pinellas County school board may have already approved a health care plan for 2010 on Sept. 27, 2011.
But during a Dec. 13 workshop, the board heard of the administrations' plans to tweak that coverage, going from a "fully insured" plan to a "risk share agreement," with the hope of possibly increasing its affordability for the district.
According to a briefing handed out during the board's workshop on Dec. 13, the district defines the two types of plans as follows:
Fully insured: Board pays negotiated premium, carrier assumes all the risk, and board risk limited to contract premium. If claims are less than expected, the board does not share in any surplus. If claims are more than expected, the board has no risk for deficit.
Risk share agreement: Board pays negotiated premium and carrier assumes all the risk. A separate account is established to track the surplus or deficit. At the end of the plan year, the board will receive 0 to 50 percent of any surplus. If a deficit occurs, it will be carried on the books with a maximum carryover of $2 million to offset any future surplus. The surplus is based upon an 86 percent medical expense ratio (MER) and a deficit is based upon an 89 percent MER. The target point (MER) is negotiated annually. Any payment of surplus is contingent upon the board being a client 120 days after the end of the policy. The deficit is carried only to offset any future surplus. The board is not at risk for the deficit.
Ron Ciranna, assistant superintendent for Human Resources, and Ted Pafundi, director of risk management and insurance, told the board that there would not be any effect on the individual employee in terms of premium cost or coverage. Essentially, the arrangement could allow the district to benefit if it experiences a surplus in a given year.
After listening to the discussion, Pinellas Classroom Teacher Association president Kim Black told The Gradebook that the matter is subject to union negotiation.
But later during the workshop, after Black had left, a board member asked if the insurance change required further board discussion. No, administrators answered. It was a "done deal," they said.