BETWEEN 'A ROCK AND A HARD PLACE' MMSD CHANGES HEALTH INSURANCE PROVIDERS WITH THREE DAYS' NOTICE EDUCATION

The Madison School Board approved a change in the health insurance provider for most school district employees on April 24, three days after the plan was shared with staff.

Board members and administrators emphasized that the district was between "a rock and a hard place," as board member Ali Muldrow put it, with current provider Group Health Cooperative-South Central Wisconsin reneging on an agreement to cap premium increases.

The change to Quartz for about 71% of MMSD employees will have a minimal effect compared to a normal health care change, as the company has agreed to continue covering the same services, prescriptions and doctors that GHC did for up to two years.

"This gives us a two year runway to figure this out and a reasonable cost savings," Muldrow said.

Madison Metropolitan School District officials sent a letter April 21 to staff informing them that GHC was raising premiums by over 16% despite agreeing in 2020 not to raise them more than 3.5% this year.

"Our first concern was the level of impact such an increase would have on our staff," the letter said. "You continue to go above and beyond for our community, and we felt you deserved a better solution."

After the district's insurance consultant, M3, received word from GHC in February about its premium increase, district officials and M3 worked with Quartz to see if there was a better solution. They were left with two options, according to the letter:

* Continue to provide employees with GHC-SCW health insurance, with no rate increase for employees in the 2023-2024 school year, but a 16.2% increase to the district, effective July 1, 2023, for an extra $5.6 million in the budget

* Change insurance carriers to Quartz, effective July 1, 2023, with no rate increase for employees in the 2023-2024 school year, but a 13.1% increase to the district, effective July 1, 2023, for an extra $4.1 million in the budget

The board discussed the subject in closed session on April 17, but there was no public indication of the change until the staff letter.

Board member Nicki Vander Meulen said the district should have communicated sooner with the board and staff.

"No offense to my district, finding out that the district knew (months ago) before the board and that it was waited on is something that really shook my trust," Vander Meulen said.

Other board members praised the work of staff to find an alternative to GHC.

"The only reason why we're having this conversation is because GHC backed out of an agreement," board member Savion Castro said. "We were responding to that and our brokers did, to the best of their ability... negotiate a best rate."

More than a dozen people submitted written comments asking the board to delay the vote until staff had more time to consider the information. District officials indicated that wasn't possible, given all the work done on the deal and the need for new insurance cards by July 1.

"Quartz has done a lot of work behind the scenes to get ready based on not knowing where the board would land tonight, but they had to do that in order to be ready to implement so that everyone is ready to go on July 1," MMSD general counsel Sherry Terrell-Webb said.

In an email ahead of Monday's vote, GHC Chief Strategy and Business Development Officer Marty Anderson wrote that the company was "disappointed that we may not be continuing the valued relationship that we have had with MMSD for the last four decades."

'Securing another option'

The district's insurance consultant offered a behind the scenes look at the process.

Breanna Hellenbrand of M3 Insurance said GHC initially sent a renewal notice "at the promised not-to-exceed rate cap of 3.5%." The company then reached out to further discuss renewal and asked if MMSD would be able to take a higher increase, which she told them was unlikely.

The company then shared in an email that it would be a 16.2% increase, Hellenbrand said.

"We expressed that we were very disappointed," she said.

Specifically, she mentioned that if GHC had alerted the district to the issue in the fall, "we could've maybe worked through that, but now we have very little time and it's incredibly disruptive to our staff and obviously to the budget."

After another meeting with GHC and district leaders, "we really needed to look at securing another option," Hellenbrand said. That led to negotiations with Quartz.

Terrell-Webb explained that the normal practice is not to "bring a problem to the board without a solution," which is why the information was not shared earlier while they negotiated with Quartz.

"I don't know how a different cadence would've worked because essentially we would've brought nothing to the board except a problem with no solution," Terrell-Webb said. "The first question was, who can take this on? We don't have very many options."

Muldrow noted that the board has shown a commitment to continuity in health insurance coverage, specifically, when it voted to continue with GHC in March 2020 despite its bid being $9 million more expensive than Quartz.

"I'm not unaffected by this shift," Muldrow said. "I don't think any board member is taking this casually. I think this is the definition of a rock and a hard place and I think the people who have chiseled away at that rock to create the opportunity for savings and stability are people we should appreciate."

Heated exchange

As the discussion neared its end, Superintendent Carlton Jenkins asked everyone in the district to "take a chill pill."

"We cannot continue to put one another under stress," Jenkins said.

He called Vander Meulen's criticism, which included an explanation that a lawyer can be disbarred for not communicating with their client, a "public lashing" that "nobody on my staff deserves," suggesting she give her criticism to him directly and not his staff members.

"It's not fair," he said. "Human decency doesn't cost anyone, but I'm going to tell you, you have been inappropriate for your tone."

Vander Meulen responded as Jenkins continued to raise his voice until newly elected Board President Nichelle Nichols shut the conversation down.

"Please stop now," Nichols said, followed by an apology from Jenkins to Nichols.

Vander Meulen posted on Facebook after the meeting that she would not apologize for her comments, adding that she believes GHC's actions were "unprofessional," administration knew about the issue in February but didn't tell the board until April 3 and that she voted in favor of the change "due to standing," indicating the potential of a lawsuit.