The Ripon Area School District (RASD) approved a change to district-funded health insurance and a nearby medical clinic for 2023 at a special meeting Monday night.
With self-funded insurance, the district becomes the insurance company and keeps the premiums it uses to pay claims and expenses.
Commercial Director Jonah Adams said SADR currently spends around 10% of its budget on medical insurance.
“Districts that are self-funded have been able to do things more efficiently, especially when they have a clinic nearby,” Adams said. “They are able to stay out of very expensive systems and also have very good long-term results.”
In a memo, Superintendent Mary Whitrock listed many other school districts, colleges and businesses that use self-funded insurance.
“Many school districts have also begun to self-fund their medical insurance so they can direct services to high-value, low-cost medical providers, retain savings when medical expenses fall below estimated premiums, and control rising bounties over time,” Whitrock wrote.
SADR staff are currently insured for medical and pharmaceutical benefits through WEA Trust, which they switched to during the 2019-2020 school year. The change resulted in a premium reduction of 6.3%. Since then, premiums have increased by 10.5% in 2020-21, 9.8% in 2021-22 and 3.6% for the first part of 2022-23.
In addition, WEA Trust will cease its activities at the end of the year.
SADR has obtained quotes from new insurers for calendar year 2023. Whitrock said after receiving the quotes, it became clear that switching to self-funded insurance is the preferred option and is comparable to the fully insured cost.
The district’s estimated maximum annual cost for self-funded insurance is approximately $3.15 million, which includes the costs of a nearby clinic. By comparison, the cost to stay fully insured with Humana is $2.97 million, without a clinic.
SADR would save about $300,000 from self-financing, mostly attributed to savings for stop-loss insurance, which protects against large claims.
The self-funded plan includes membership in EHCW, a cooperative that offers discounts to medical providers and access to free chiropractic, behavioral health, dermatology and other services, primarily in the Fox Valley.
A clinic near the site on Eureka Street with two cardiologists, an orthopedic surgeon, two physiotherapists and a primary care physician would be available free of charge to staff.
Primary care physician Dr. Eric Miller and physical therapists Dr. PJ Christopherson and Dr. Autumn Pawlowski were present at Monday’s meeting to answer questions from school board members.
Adams said he’s spoken with people in Menasha and Chippewa Falls who love their nearby clinic.
“We know that when people have access to free care, they have better long-term outcomes and they catch things sooner,” Adams said.
Under the self-funded plan, the district would attempt to refer members to the clinic near the site and other nearby providers who have direct contracts with EHCW.
SADR offers a basic insurance plan or a buy-back plan. Under the basic plan, the annual premium for self-funded insurance ranges from $1,185 for a single person to $3,168 for a family. Annual buyout plan rates for self-funded insurance range from $691 for a single person to $1,848 for a family.
Health insurance plans are categorized by tiers, with Tier 1 plans offering a lower premium than Tiers 2 and 3. Tier 2 offers providers from a wider network. Tier 3 is considered off-grid with the highest costs.
In 2023, participants would have free access to Tier 1 medical providers without copayments or they would have the option to stay with their current Tier 2 medical plan providers, using copayments up to their maximum.
Adams said medical costs in Ripon are higher than in New York. By using self-funded insurance and independent medical providers, SADR cuts out the middleman, reducing costs for everyone. He pointed to the Menasha Joint School District, which saved $1.7 million in its first year after switching to self-funded insurance.
Adams said the negatives of the plan include a 1% risk that the district will reach its aggregate limit, which is the maximum amount the insurer will pay for claims during the year. This would increase the district’s self-funded insurance costs significantly more than if fully insured.
The other downside is the increased cost. Staff on the current base plan would see a 13% increase in premiums, while staff on the current buyout plan would see a 108% increase in premiums. The 108% increase is equivalent to an additional $30 per month for a single person.
“It’s a big increase, but they still pay very little cost,” Adams said. “It’s still very low but it’s 108% higher than before.”
The proposal to move the district to self-funded insurance passed 6-0 with two abstentions.
Pawlowski, who will work at the clinic near the site, said the changes will benefit SADR staff.
“It will be amazing for members to be able to contact us directly in the community and they won’t have to worry about paying anything,” she said.