School System Digs Out of $17.5M Insurance Hole

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.”

dnadler@loudounnow.com
twitter.com/danielle_nadler

6 thoughts on “School System Digs Out of $17.5M Insurance Hole

  • 2016-12-10 at 1:44 pm
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    Let’s critically review this “CareerSwitcher”…

    He says we should check the facts but yet provides none of his own.

    The health subsidy provided by LCPS has increased each and every year. Our “career switchers” unfortunately don’t understand their paychecks or basic economics. I sure hope he is not teaching that.

    • 2016-12-10 at 7:22 pm
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      The eviidene is in the actually paychecks. When take home pay goes up $10-20 a week, that is not a significant raise. The math here is not that tough and definitely not hidden.

  • 2016-12-09 at 3:02 pm
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    Notice that this money came out of the pockets of teachers and staff who are paying more and seeing their real income dwindle.

    • 2016-12-09 at 5:43 pm
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      False. Each year, teachers and staff receive higher subsidies for their health insurance. E.g. in one year, staff receives an $11K subsidy. The next year, they receive more or say $12K. That is an increase in compensation. The fact that what they purchase, health care, has gone up just like gas/food/toys is irrelevant. Higher subsidy = more compensation.

      • 2016-12-10 at 12:22 am
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        You might want to actually check your facts. Take a look at the bottom line. Simply throwing out numbers does not make you informed.

      • 2016-12-11 at 11:01 am
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        Not sure that many people will agree that higher health care costs are irrelevant.

        Consider if you got a parking allowance to pay for the garage in your building. If the cost to park goes up but your allowance does not, then you are paying more to simply work at your office. You would definitely notice this additional cost. and probably not be too thrilled, especially since parking is not a luxury item. Health care is the same. It is not a luxury. When costs goes up, both in premiums and in out-of-pocket expenses, you will notice. Those not earning high salaries like SGP will notice even more.

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