UFSPA & UFEA Members:
We wanted to take this opportunity to provide you with some important and timely updates regarding heath insurance. Please take a few moments to read through the information provided here, and then feel free to ask questions of any of the Insurance Committee members if you’d like more information or clarification.
There Are Some Changes Coming
The Insurance Committee* has been monitoring the insurance plan performance closely, and recently voted unanimously to recommend some changes to take effect in January, 2018. We wanted to get this information out to you as quickly as possible to give you time to understand the changes, evaluate your situation, and make a change in your coverage during the upcoming enrollment period if you desire. More information about the reasons for the changes, the changes themselves, and steps you can take are included below.
*The Insurance Committee is co-chaired by the UFEA President and a central office Administrator. The Committee will consist of the two co-chairs and:
- (7) UFEA bargaining unit members appointed by the Association
- (2) UFSPA bargaining unit members appointed by UFSPA
- (2) Administrators
- an additional employee representing other employee groups
- a retiree; the retiree shall be chosen by the retirees participating in the plan, pursuant to an election administered by the Administration
Our Prior Experience
If you’ve been in the District for any length of time, you are undoubtedly aware of the challenges we’ve faced when it comes to health insurance, and the changes we’ve lived through over time. Despite the changes, members have consistently communicated a desire to have a health insurance plan that is available to members with no premium cost to the member (with premiums paid completely by bargained Board contributions).
In an effort to maintain a plan that is covered by the Board contributions, the plan benefits periodically change. Essentially, when costs go up more quickly than bargained Board contributions cover, members have to “pay for” the difference — and historically members have communicated they prefer to pay for it through changes in benefits rather than through premium contributions.
In addition to an HSA (Health Savings Account) option, there are currently three standard PPO (Preferred Provider Organization) plans available to members. The Silver Plan which requires no premium contribution from members for employee coverage. There are also Gold and Platinum options available, with richer benefit packages, that require members to contribute toward premium costs.
As a group (meaning all those covered by the District’s health insurance plan), we’ve experienced a rough start to this plan year. You may recall that after several very steady years where the plan performed at or better than anticipated (and premium rates did not increase), we had a couple years in a row that included higher claims than anticipated. We had enough in the fund reserves to cover those years, but those years significantly depleted the fund reserves. Some changes were made in the summer of 2016 and those changes had positive results. During the 2016-2017 year, the fund reserves actually increased slightly during most of the year and the fund ended the year just about where it started.
The Summer of 2017
It’s not unusual for the summer months to be much more expensive months for our insurance plan. Members often schedule elective procedures for when they won’t have to miss work. Employees leaving the District often take advantage of their insurance coverage over the summer while they still can, and some new employees take advantage of their insurance as soon as they get it. This has been a normal, predictable, and understandable trend for our insurance plan.
While the summer of 2017 was no different, the increases in costs to the plan were more significant than usual. In fact, in just a few months over the summer over half of the reserves were depleted, putting the plan in a difficult position and forcing the Insurance Committee to make some difficult decisions.
The Committee could have done nothing and recommended no changes. We could have “rolled the dice” and hoped for the best. Perhaps things would turn around on their own and we would have nothing to worry about. Or perhaps the fund reserves would be completely depleted, and the Board would have to pay for the claims that came in once the fund balance was zero.
We Didn’t See “Doing Nothing” as an Option
There are contract negotiations ahead, for both UFSPA and UFEA. We successfully bargained 5% increases to the Board contribution for insurance last time we negotiated, and we know further increases are needed. Health care costs are increasing and health insurance costs are as well.
We believed that the responsible and right thing to do was to be responsive to the trend we saw in the plan reserves (contractually, we are supposed to try to maintain at least three months of expected claim costs and it had dipped well below one month of projected costs). And, we believed going to the bargaining table seeking increases in the Board contribution would be an easier (yet still difficult) task if ahead of that time members have done everything we can to address the reality we are facing. If the fund reserves were depleted, leaving the Board to cover additional claims costs, we recognized bargaining, especially regarding insurance, would be even trickier than it may already be.
So we needed to do something.
We needed to put the plan in a better position ahead of bargaining. We needed to be responsive to the trends we were seeing in the fund’s reserves. As a result, we’ve recommended some changes beginning in January, 2018.
January, 2018 and Beyond …
Starting in January, there will be some changes to the benefit packages. Most of the changes impact the Platinum Plan, which is the plan where the costs exceed the contributions most significantly. You can see all of the plans and rates here (areas that are changed are in red): 2018 Plan Rates for Unit 5 . For reference, you can review the 2017 Plan Rates . The changes in each plan (and the monthly cost to the employee) are highlighted below:
- Deductible is increased from $4,000 to $4,500
- Maximum out-of-pocket is increased from $4,000 to $4,500
- Maximum out-of-pocket is increased from $6,500 to $7,000
- *This is the default plan for employees who do not elect either the HSA plan or the Gold or Platinum PPO plans
- Maximum out-of-pocket ($5,000) and separate prescription out-of-pocket ($1,000) are combined for a new total maximum out-of-pocket of $6,000
- Non-Formulary prescriptions w/ a generic available are increased from $100 to $100 + the difference between the generic & non-generic
- Max out-of-pocket ($3,000) & prescription out-of-pocket ($1,000) are combined and increased to a total of $5,000
- Specialist office co-pay are increased from $20 to $40
- Prescription increases: Formulary from $25 to $40 • Non-Formulary from $50 to $80 • Non-Formulary w/ a generic available from $50 to $80 + the difference • Specialty drugs from $50 to $100
When the enrollment period begins, you will hear from the District as you always do and be given the option of selecting which Plan you want to participate in. The Silver PPO plan with the $1,000 deductible will continue to be the default plan.
Further, we will be bargaining this spring, please be sure to stay engaged! When the bargaining survey comes out, take some time to respond and make your voice heard. We are confident that health insurance will be an important topic of discussion at the bargaining table and we will want to make sure we have a clear picture of member interests and priorities.
Links & Resources
- Kaiser Family Foundation Health Benefits Survey:
- Segal Health Plan Cost Trend Survey:
- Kaiser Family Foundation information about Health Costs:
- Kaiser Family Foundation Recent Trends in Health Insurance Premiums:
- Kaiser Family Foundation and the Journal of the American Medical Association: Recent Trends in Employer-Sponsored Health Insurance Premiums:
Questions or Concerns
- For questions or concerns directed to the Insurance Committee members, you can email the UFSPA and UFEA Insurance Committee members individually, or UFEA members may email the UFEA Insurance Committee members collectively at email@example.com.
- If you have questions about your coverage, claims, etc. you can always contact Clemens & Associates. They can also help you evaluate your current situation and give you advice about which plan might be best for you.
Please feel free to reach out if we can provide more information or clarification.
The UFSPA & UFEA Members on the Insurance Committee: