Marion schools will fund their own insurance next year

Marion Community Schools will fund their own health care plan next year in hopes that the benefits will outweigh the risks, the board of trustees decided during a meeting Tuesday night.

The board voted unanimously not to renew the current state employee-funded health insurance plan and instead fund its own customized plan, after a recommendation by Michelle Bunker, Insurance Management Group benefits consultant and partner, who has been working with the system's health care plan for the past four years.

The projected renewal cost with the state was set to increase in 2024 from $4.4 million to just over $5 million in 2024, according to Bunker.

For the same cost, the corporation can fund its own insurance at 125 percent, also adding stop-loss insurance for catastrophic events, Bunker said.

"So, we are going to fund, and put that premium -that set amount of premium-into a bank account and claims will pull from that bank account," Bunker explained.

Although there is the risk that claims could come in higher than projected, prompting the catastrophic insurance, the school corporation stands to gain if the reverse were to happen.

"Let's say at the end of the day, we have the worst claims year ever. They can't take any more than that 125 percent because then their insurance, that excess loss insurance kicks in but let's say our claims come in at 100 percent – at expected – or 90 percent of expected, that money is sitting in Marion Community Schools' bank account," Bunker said. "And you've achieved providing a better plan for your employees. You've provided lower costs for your employees in future years as well and lowered plan costs for the future of Marion Community Schools. Ideally that's why this is making sense now."

The self-funded health insurance plan is being modeled from the current high deductible state plan employees are accustomed to, featuring three tiers of service, preferred, in-network and out-of-network, but will change so that local health care options are the preferred network, Bunker said.

Out-of-pockets costs for employees obtaining service with Marion Health will be lower through negotiated contact rates and by bringing those services into the Tier 1 bracket, which features a lower out of pocket deductible at $1,600 for an individual and $3,200 for a family.

Currently through the state's plan, Marion Health is a Tier 2 provider with a higher deductible of $2,500 for an individual or $5,000 per family, Bunker said.

"We can only have this type of accommodation if we are what's called self-insuring. Marion Health does not participate in their Tier 1 network so for members to receive that Tier 1 benefit, they were having to go out of town for services," Bunker said. "I would say 90 percent of your claims are going to Marion Health anyway and so not only is the member spending more money on their deductible, so is the plan."

United Health Care will be the Tier 2 network and True RX will replace Caremark for pharmaceutical services, Bunker said adding that Healthcare Savings Plans will remain unchanged.