School board looks at health insurance options

High usage rates will impact the Medford School District’s chances when shopping for health insurance this year. This may result in changes for staff in cost and plan changes as school board members seek to find cost saving options.

Cory Tothe-LaPointe a senior benefit consultant with Spectrum Benefit Solutions, the district’s insurance broker, was at Monday evening’s school board meeting with projections about what the district could see next year when it came to health insurance renewals. Due to building maintenance work being done in the district office, the meeting was held at the Medford Area Middle School Cafeteria.

The district currently contracts with Aspirus Health Plan for health insurance and provided that usage rates remain under 100% then the renewal is capped at a 12% increase for next calendar year. According to Tothe-LaPointe, the provider looks at claims from June 1, 2021 through May 31, 2022 and paid through July 31, 2022 to determine its rate projections. She noted that in June 2021, the district had a 210% loss ratio with one claimant having over $400,000 in claims. Tothe-LaPointe noted that individual has had minimal claims in 2022. Even with such a large usage rate for June 2021, the district ended the year with a 105% usage rate, this compares to the 121.8% usage rate in 2020. “Our loss ratio hasn’t been great in a while,” said board member John Zuleger.

The loss ratio compares the amount of premiums paid to the amount of claims the health insurance company reports paying out. A loss ratio above 100% means the insurance paid out more than it received in premiums. In general, lower loss ratios are looked at more favorably. According to Tothe-LaPointe the current loss ratio for claims paid through May 25 for the district is 95.8%. However it was noted that usage goes up in the summer months particularly with staff off of school. She noted that she would like another month of history to reduce the impact of the large claims in June 2021. “Another month of claims would help,” she said.

The size of the Medford School District’s insurance group works in the district’s favor. Board member Brian Hallgren noted that at 999 members covered and about $6.2 million in premiums, insurance providers would still like to have the district’s business.

According to Tothe-LaPointe, Security Health Plan, which previously provided insurance to the district, is interested in getting that business back and presented several options to project renewal rates of 9.22%, 4.26%, 1.64% and a potential decrease of .95% depending on plan changes and the amount of additional cost put on the employees.

Tothe-Lapoint explained that the more favorable rates would require policy changes such as requiring those using care to pay a percentage of the cost even after the deductible is met for the year. Other changes could be seen in the prescription drug coverage with costs to consumers going up. She noted that at higher cost of the drugs, there would be more compliance with drug purchases with people deciding not to get prescriptions filled due to out of pocket expense. However she noted that instead of a prescription for a rescue inhaler being filled, the district could end up with emergency room visits.

Tothe-LaPoint also cautioned that Security Health Plan is scaling back on the amount of preventative care that it historically covered to more match the guidelines followed by other insurance providers. She noted that many users cite those preventative care options as why they preferred Security Health, and warned that they would be going away.

“It saves money for the district, but the employees pay more,” said district administrator Pat Sullivan of the proposed plan changes.

Hallgren suggested asking about 2-year contracts for health insurance rather than revisiting it every year. He noted given the size of Medford’s insurance group, he would think they would interested in securing a $6 million account.

Tothe-LaPointe said her fear would be at the end of the contract, the district would see a 20% increase in costs.

“It is a $6 million account,” Hallgren said. “It is simple business.”

Land Contract

The school board will use some of its carryover funds this year to get budget flexibility in upcoming years.

Several years ago, the district entered into a land contract to purchase about 24 acres of vacant land adjacent to the Medford Area Elementary School. The district pays $80,000 a year on the land contract which comes from the district’s operations budget.

Finance director Audra Brooks proposed that in addition to the normal $80,000 payment this year, that the district use $114,400 from carryover funds to pay off the remainder of the balance prior to the end of the fiscal year on June 30.

Under state funding formulas the district gets aid on money that is spent in the year, the additional spending to pay off the land contract early would increase the amount of aid the district receives for this year.

Board president Dave Fleegel suggested the district look at applying at least $50,000 of that $80,000 a year to the Fund 46 account to set aside money for the eventual development of that parcel.

It is currently being used as a hay field with the hay used to feed the livestock in the school barn. Sullivan noted that surplus hay was sold last year raising money to help cover the agriculture program at the school.

One of the district’s goals is to put an access road through the property connecting the school complex with CTH Q to relieve traffic congestion before and after school and at events. Fleegel said they may be able to save up to get at least a gravel driveway in at some point.

Board members approved paying off the land purchase.

Staffing and sections

Staffing shortages are starting to hit home for Medford schools. Elementary principal Dan Miller reported that the district has three open elementary level teaching positions and one elementary special education position for the coming year but as of Monday has only had one applicant for those four positions.

Beyond filling vacancies, Miller raised concerns about the shortage of substitute teachers especially with the elementary school looking at having four maternity leaves this year.

This has caused Miller to look at some out-of-the-box ideas such as dividing the students from one class up among the other classrooms in that grade during the maternity leave rather than bringing in a substitute.

“That might be better to having a sub or having no sub at all,” Miller said.

“What if we took all six sections and divided it back out?” Zuleger asked, noting this would eliminate some complaints about a particular class being impacted and could be a good thing for the students overall to interact with other groups of students.

Miller also reported on the number of 4K students coming into the district next year. Those numbers are slightly lower than in recent years, however that may be more due to how the district provides 4K at two-days a week than a reflection on the number of students coming into the schools.

“Two days a week is not being responsive to parents,” said Joe Greget, the district student services director.

Similar programs at private schools in the community are full, largely because they are five days a week, which is easier for parents.

Sullivan said that is an issue the administration and staff have been looking at and he told board members he will be coming to them with a plan for a five day a week preK program. He said they received funding through a grant to study the issue.

One of the biggest challenges he said was having the classroom space for it. He said that the district may need to look at renting spaces in other buildings in the community for those classes. Fleegel noted that when he started in elementary school in the district it was in a classroom the district rented at the old Holy Rosary School building. “It is not out of the box, but presents plenty of challenges,” Fleegel said.

Other school district buildings were primarily holding steady with minor shifts in the numbers of sections as larger grades moved through the district.

Sullivan said that overall, he thinks the district has done pretty well in getting positions filled at a time when they are not seeing a lot of applicants.

In other business, board members:

_ Received an update on summer school and the challenges of staffing it with a teacher supervising a large number of students per grade level as well as having other staff members under that teacher. “What is the reason we have summer school? Is it babysitting, is it education,” asked Hallgren, noting that if it was just babysitting that is not what the district does. Miller said that sometimes it is babysitting but there is also education and activities.

_ Received an update that the district still has not received any word on if the FEMA grant for a storm shelter structure at the school has been approved. Sullivan noted that they were told they would get word in June, but have not.

_ Reviewed and approved policies on second reading dealing with the Rural Virtual Academy. In related action, the board approved a shared enrollment policy for the RVA that was presented from the RVA Board. There were also a number of editorial changes approved reflecting changes in handbooks to include previous decisions of the board.