School Board holds line on health premiums

Jul. 1--The School Board reached a consensus Monday not to raise health insurance costs for its 5,749 employees.

Though no employee will see a premium hike, the board agreed to change the Florida Blue free plan it offers to individual employees as a recruitment tool.

The Plan 1 single option, which is provided to 3,685 employees for free, will be switched from a PPO (preferred provider organization) to an HMO (health management organization).

Board members are faced with a $7.7 million increase in Florida Blue premiums. By changing the free Plan 1 single option from a PPO to an HMO, the district will save $2.6 million, officials said.

Board members said while the original plan was not to shift any employee to an HMO, the district has a tight budget and a compromise had to be arranged.

Under the new plan, no employee will see an increase in his or her premium. Employees enrolled in Plan 2, Plan 3 or Plan 4, whether single or family, will still have a PPO with no substantive changes in coverage. Employees pay $266.09 per pay period for the Plan 2 family option, for example.

Board members said employees currently using the free Plan 1 single option can upgrade to one of the PPO options, but will have to pay the premium.

The reason the board didn't want to move any employee to an HMO is that it would restrict employees, especially since most health care outside Marion County would not be covered.

The HMO option requires employees to be in network, or basically in this part of Florida. Under an HMO plan, only emergency hospital care would be covered out of state, for example.

During a recent work session, the board discussed a 19.2% health insurance hike to the School District, which is Marion County's largest employer.

If all plans were left unchanged, the district's health insurance premium would rise from $42.9 million in 2019 to $51.2 million in 2020. Of that $8.3 million increase, roughly $600,000 will be paid by employees using retiree, COBRA and FMLA plans not covered by the board.

Lori Lively, director of risk management, has told School Board members that she needs a a decision quickly if the board changes the Plan 1 single option to a HMO.

Lively said it will take months of training the 3,685 employees on that free single plan. Each of the employees must find a primary care physician to manage their care by 2020.

A final vote on the health insurance plan is slated for the July 23 board meeting. Monday's decision will help Superintendent of Schools Heidi Maier and her administrative team make the final changes to the 2019-20 school budget.

The special meeting was slated because board members had hoped to get an update on renewed AdventHealth and Florida Blue contract negotiations, which had stalled after a disagreement.

AdventHealth Ocala operates the local nonprofit hospital, formerly known as Munroe Regional Medical Center. AdventHealth Ocala took over the hospital in 2018.

An existing Florida Blue contract allows all new AdventHealth acquisitions to receive a guaranteed 5.1% increase in reimbursements. The AdventHealth reimbursement increase will cost the School District $2.24 million in additional Florida Blue premiums.

Thomas Buss, of the School District's insurance servicing agent Barrett, Liner & Buss, LLC, told the board that negotiations continue and no deal had been reached.

Buss said he hopes AdventHealth Ocala's increase will be phased in over two or three years and the increase will be less than projected in 2020.

The board agreed that many of the district's employees cannot afford an increase in health insurance. Board members do have a one-time sum of $1.7 million in School District reserves earmarked for health insurance costs.

The School District only has to budget half of the extra cost in the 2019-20 budget. Half of the insurance cost increase for 2020 will be paid in the 2019-20 budget and half will be paid from the 2020-21 budget. The School District budget year began Monday, while the insurance is for the calendar year.

That means the actual increase on the 2019-20 budget will be $2.55 million. If the $1.7 million in one-time reserves is applied, the extra cost to the 2019-20 budget would be about $850,000.

Of course the insurance shortfall could be reduced further if the federal insurer's tax, which is $1.2 million in Marion, is repealed in October.

However, the board must budget the federal insurer's tax because the budget must be finalized before federal lawmakers will consider repealing that tax.

Joe Callahan can be reached at 867-4113 or at [email protected]. Follow him on Twitter @JoeOcalaNews

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