Las Vegas teachers’ health insurance trust reports it will pay off $35M debt in June

THT Health, the self-funded insurer that covers more than 30,000 Clark County School District teachers and their dependents, will have about $5 million to $8 million in reserves when it settles the debt in June, CEO Tom Zumtobel told the School Board last week.

THT Chief Financial Officer Andrew Helms said that, ideally, the trust would have enough money on hand to cover what it owed on claims for services that had been incurred but not yet reported — an estimate that officials currently peg around $30 million.

"As soon as we repay that $35 million we're back to building back up to that 30 million," he told the Board Thursday. "How long it's going to take: that depends on our net income, it depends on how much we're able to put away each month."

Helms estimated 12-15 months. Zumtobel said it could take 18 months.

Either way, Zumtobel maintained his confidence that THT, formerly known as the Teachers Health Trust, is on track to repay its $35 million note in full. The note is due June 30.

CCSD doesn't oversee THT but it has a significant vested interest since extending the interest-free taxpayer bailout in 2021. The district uses the term "prepayment" when referring to the $35 million, and THT treats it as a loan.

Zumtobel, who took over the helm just before the trust accepted the loan, said THT could rebuild its coffers faster by charging higher premiums, but it doesn't want to put more burden on teachers. It has a $15 million line of credit it can tap if needed, he said.

As of June, THT had about $20 million on hand toward the $35 million, according to the Thursday Board presentation. By January, it had accrued $40.6 million. Projections show continued increases.

The School District's CFO has previously said that monthly updates submitted between independent annual audits had been generally accurate and cause for optimism.

According to the review for the fiscal year ending in June 2023, auditors noted the trust had $32.3 million in net assets available for plan benefits as of June 2023, and payable and incurred claims of $73.6 million.

The trust also still faces a class-action suit — filed in Clark County District Court and moved to federal court — alleging that teachers were denied coverage for certain health treatments, overcharged for copays and exceeded out-of-pocket maximums. The case is pending.

In the same audit, issued in December, auditors issued a "substantial doubt about the trust's ability to continue."

But this bleak forecast rested heavily on the district's loan. In a statement of assets and liabilities, THT had $36.4 million in liabilities, which included the $35 million loan.

THT took in slightly less in revenues last year versus the year prior, which Zumtobel attributed to fewer teachers enrolling in plans. It also cut medical and administrative expenses, leading to a net income of about $23 million — more than $10 million better than in 2022, the most recent audit shows.

When THT took the bailout, it had swollen administrative ranks, redundant vendor and consultant contracts, and a deep well of unpaid claims.

Zumtobel said THT whittled its employee roster from about 40 people to 17 people. It now has fewer than five executives when it previously had 10, eliminating some unnecessary high salaries, he said. It also streamlined vendors and consultants.

"THT has owned it. You have owned it. We've owned our piece as well. We've done our best to try to contribute and make things better," School Board President Evelyn Garcia Morales told Zumtobel. "My concern is, how do we make sure that we're not in this place again?"

The trust was created 40 years ago by the Clark County Education Association teachers union.

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