The Evansville Vanderburgh School Corporation Board of School Trustees heard information tonight (5/7/12) about changes that are being implemented to the Welborn Health Insurance plan that most EVSC employees have, that would reduce employee premiums, but increase deductibles. The change in plan is due to the corporation’s desire to not be forced by Indiana State Statute to be a part of the Indiana State Health Insurance Plan, which would potentially cost the corporation more money, offer fewer benefits to employees at greater cost, provide the corporation no possibility for input into cost savings measures or benefits, and also force the corporation’s employees to be on the plan for a mandatory two-year enrollment period before being permitted to exit.
“Due to the provisions of our collective bargaining agreements employees pay between 12 and 15 percent for access to their EVSC Welborn Health Insurance. That provision, coupled with our desire to provide the best health insurance possible, mandated a change in our plan design,†said Superintendent David Smith. “I understand health insurance is an extremely important benefit afforded to our employees and trust that all will understand the dynamics that led to this change.â€
Under the new plan design announced, premium levels paid by employees will be reduced by nearly 23 percent from the May 1 renewal rate and office and generic drug co-pays will remain the same. There will, however, be an increase in health insurance deductible amounts. Effective June 1, the deductible levels go to $1,500 (individual)/$3,000 (family). The maximum out-of-pocket (which includes office co-pays and deductibles) will be $3,000 (individual)/$6,000 (family). In essence, the EVSC was looking for a change in plan design that would impact the fewest number of individuals. Fortunately, 87% of EVSC’s health insurance participants did not reach their maximum out of pocket at our previous lower out-of-pocket levels.
During the meeting, Smith explained that there is a trigger that is mandated by law that forces a public school corporation onto the State Plan. This trigger is based upon the employer’s share of the cost of the health plan compared to the funding the state provides for its employees. Under the EVSC’s collective bargaining agreements, the EVSC will exceed this trigger if no changes are made to the current plan. The only way to avoid the mandatory move to the Indiana State Health Insurance Plan is to reduce our health insurance expenditures.
Options to reduce expenditures that have been investigated by the EVSC include: excluding a spouse who has access to health insurance through their employer; mandating biometric testing and wellness initiatives that would aid in the detection of health issues; instituting higher unhealthy habit premiums; auditing employee enrollment to verify qualified enrollees; implementing an EVSC Health Clinic to treat illness on site; and modifying the plan design.
If the EVSC was forced to go to the state plan, expenditures for access to health insurance most like EVSC’s current plan would grow to nearly $41.8 million (up from the new EVSC rate of $23.4 million). Total employee contributions would grow from $2.8 million to $16 million for that same plan.
On the state plan, an individual employee who by contract pays 12 percent of the premium would pay $3,283.02 annually (up from the new EVSC rate of $723.51 annually). The state plan does not offer an Employee+1 plan that many EVSC employees currently have, so they would be forced to pay for the “family†plan offered by the state. Employee+1 and families on the family plan would pay $9,136.40 annually (up from the new EVSC rate of $1,363.71 for Employee+1 or $1,645.83 for the Family Plan annually).
The EVSC is also still extremely competitive with area school districts by having the lowest employee premium cost for health insurance. Employees in neighboring districts now pay from $5,880 to $13,179 annually to access health insurance family plans, while EVSC employees will pay $1,645.89 annually for access to our family plan.
