Insurance trust board updates school board on its work

The president of the Huntington County Community School Corporation Insurance Trust Board gave school board members an update on their work on Monday night.

Chris Hoke, a science teacher at Huntington North High School who serves as the insurance trust board's president, provided the board with a quarterly update. Hoke's group oversees the corporation's insurance trust, developing and administering the corporation's employee health, life and long-term disability insurance program. School Board members are not part of the trust board, which was established in the mid-'90s.

"I think it's important for the community to understand that the insurance trust board is a totally separate entity from the school board," explained HCCSC Superintendent Tracey Shafer. "The trust board works independently and works to provide a good, affordable benefit to the employees of Huntington County Community Schools."

The trust board has been working on the strategic plan for 2009 and, in doing so, looked at the history of the trust, how it works and what the 2008 experience was, Hoke said.

"It (the 2008 experience) really is the thing that frames what the 2009 strategic plan is, based off that claims experience," he noted.

While the corporation's insurance trust is in fairly good shape right now, it ended the 2007-08 school year a little behind the eight ball.

"Through February 2009, we were 2 percent below expected medical and prescription claims," Hoke told the Board.

Claims for 2008 ended above what was anticipated, however.

"Expected claims when we did planning for 2008 were 5 million, 421- some-odd thousand dollars. Actually claims came in higher - about 4.6 percent - so we had an unfavorable claims experience."

In looking at the history of 2008 paid claims, Hoke said about 80 percent are attributable to medical costs while the remaining 20 percent are for prescription drugs. Several plan members also had high claims for the year.

"Fifteen members exceeded $50,000 in medical and prescription drug claims," Hoke said. "Fifteen members represents about nine-tenths of a percent of the overall membership and in 2008 that ran just over 1,600 people - that's employees and all their covered dependents. So nine-tenths of a percent of the membership really accumulated over 30 percent of total claims."

What the trust board learned from those statistics is that it is claims that drive up the cost of the plan.

"So from our standpoint as we look is how do we continuously improve and refine what we're doing," Hoke said. "It's a very small group of people in the plan that are driving a large portion of that." One person actually went over the $200,000 limit, "so we had a specific stop-loss claim," he added.

The average age of school employees on the plan is slightly above the average benchmark as is the member-to-subscriber ratio, Hoke noted. Families plans are also slightly higher than average, while the number of people utilizing the school corporation's insurance in 2008 was down slightly from year's past, he said.

Annual premium costs for HCCSC plan members is $5,498 for a single person or $12,997 for families. The Trust Board looked at national statistics to see how the corporation's plan measures up.
"We're right at the national average," Hoke said. As far as deductibles, the corporation is also "right in line" with the national average.

While the trust board has been in existence since the mid-1990s, a change in the way it functions was made about five years ago. A restated agreement from the school board in 2003 set up the trust board as a separate entity - a move that was the result of an audit finding from the State Board of Accounts, Hoke said.

"What that means in short is that the trust functions as a separate entity removed from the District in the sense that it keeps a separate set of books, separate financials," Hoke related. "Those are provided to the dtate board of sccounts as a part of the audit process that's done for the District."

The state board of accounts laid out plans in that 2003 finding as to the make up of the trust board, in accordance with the corporation's collective bargaining agreement.

"Five of those 10 positions are appointed by the superintendent as a representative of the school board," Hoke said. "The other five are appointed by the teacher's association." In addition, "there are three non-voting members who represent classified staff that sit in an advisory capacity but do not vote on policy."

Members of the trust board include the superintendent; Dave McKee, assistant superintendent for business; Chuck Grable, assistant superintendent for instruction; Cindy Kiefer, principal of Flint Springs Elementary; Paul Roth, principal of Roanoke; and teacher's association appointees, Pam Hesting from Lincoln; Hoke and Tom Spahr from the high school; Beth Husband from Lancaster; Doug McElhaney from Crestview; and Dianna Folk, Rich Hertle and Susan Bowman from Riverview.

The mission of the trust is "to develop and administer the medical, life and long-term disability plans for the employees in the district," Hoke told the board. "That entails soliciting bids to procure stock loss for the trust and conduct RFP processes for different services and coverages that the trust would govern and administer." The trust also develops and oversees an employee education program, he added.

As part of that process, the trust board recently hired a new consultant. As of April 1, the plan consultant is LoCascio Hadden and Dennis. Other contracted services of the trust include: pharmacy and vision, Anthem; dental, Delta Dental; wellness program, Spectrum; stop-loss insurance, Majestic; life insurance and long-term disability, Sun Life; and financial investment consulting, Wells Fargo.

The insurance trust board will continue to look at ways to get the best value for school corporation employees and will continue to update school board members on their progress four times a year, Hoke said.