Three years after school leaders had to ask for help from county supervisors to help them cover an unexpected boost in health care costs, they say the outlook is much rosier.
In fact, the projections for health insurance costs are the rosiest they’ve been in a long time.
“We’ve got good news,” E. Leigh Burden, assistant superintendent of finance, told the Loudoun County School Board at a recent work session.
She and Director of Employee Benefits Gabrielle L. Cotman told the board that, last fiscal year, the school system brought in $161 million to its self-insurance fund and paid out $143.4 million in claims. The school system operates a self-insured fund, which means revenue that employees’ and the employers’ pay should at least break even with the claims paid out each year.
“This is the first time we’ve seen a reversal of claims exceeding revenue,” Burden said.
That helped them make up a $17.5 million shortfall, some of which was from a big increase in employees going to the doctor in 2012 and 2013.
“We now have a net of $23.8 million in the self-insurance fund, which is about 15 percent of the self-insurance fund and the amount that we argued for strenuously many years ago that was the right level due to the volatility of health care funds,” Burden said.
Cotman pointed to several changes that helped bring in more revenue and reduce costs. For one, the School Board voted to increase employees’ deductibles and out-of-pocket maximums, as well as offer a third health insurance plan to employees, a high deductible plan with a health savings account.
Cotman’s office also ramped up efforts to better educate employees on what plan would be most cost effective, with putting particular emphasis on that new third option.
It also rolled out a wellness program, that includes a monthly e-magazine called Wellness Works and a weight loss challenge in which 61 employees joined and shed close to 500 pounds in 10 weeks.
“I know some think wellness is just fluff, but focusing on wellness can actually help reduce costs,” Cotman said.
She told board members that attracting and retaining the best and brightest talent is more than about providing competitive pay, but offering competitive benefits.
“And our ability to provide competitive benefits package hinges on our ability to balance cost,” Cotman said. “We’re seeing huge strides toward our goal to better manage costs.”