Bartholomew Consolidated School Corp. employees will see a 15% increase in their health care premiums beginning Sept. 27.
The corporation’s health trust board of directors announced the increase in a letter to all group health plan participants on Aug. 23. BCSC is a self-insured school corporation, meaning its health trust is responsible for maintaining funds and setting premiums that will allow them to maintain reserves to pay claims.
Members of the board include two teachers from the Columbus Educators Association, one support staff representative, one school board member and a board chair, currently John Green, Columbus North High School assistant principal.
In the letter, the board explained that the trust’s reserves are down to less than $300,000 as of Aug. 23, resulting from historically high medical claims, which are up more than 23% in 2019 alone, and increases in the usage and price of specialty and brand prescriptions. The board also said plan design changes did not improve claims or generate savings at the levels that were predicted.
“While it is impossible to predict claims costs, the trend certainly indicates that we will continue to experience high costs,” the letter read. “While this change is not easy to announce or for members to accept, it is a necessary step to safeguard the future of the trust.”
The board approved the 15% increase at its Aug. 21 board of directors meeting. The 15% increase will also affect the school corporation, which pays $6 for every $1 that is contributed by employees to the health trust fund.
The new rates will go into effect on the Sept. 27 paychecks.
An employee’s per pay increase could range from $5.31 to $53.53 depending on the individual’s plan option and how many paychecks they receive each year. The 15% increase will affect the last seven pays of 2019 through Dec. 31.
“Since the spring, we knew and brought to the trust the possibility that we would have to implement a mid-year premium increase if our claims continued at the rate that they were,” Phillips said.
He said things took a smoother turn, but the corporation faced large claims in July and the beginning of August.
“It was clear we were not going to make it to the end of the year with our current reserve levels,” Phillips said.
Premiums will reset on Jan. 1, aligning with a plan redesign to make improvements, Phillips said. In the coming months, the health trust will work to recommend new premiums and a new plan design for 2020. He said the new plan design will be more competitive with other school districts.
At the end of October, BCSC will host an open-enrollment period for employees to make a choice of what plan they want to use — option No. 1, a high-deductible health savings account, or option No. 2, a low-deductible PPO plan. Phillips said the corporation encourages employees to switch to the high-deductible plan if possible because the premiums decrease, even with the increase, and offers the use of a health savings account.
“We’re confident that with the new 2020 plan design and premiums resetting so we adequately fund our plan, we’ll get through this,” Phillips said. “We understand it is not easy for the trust to vote to do this. It’s certainly not easy for our employees to see an increase in premiums for those seven pays. In order for us to maintain our plan, we had to do something.”
