LHUSD employee benefits: keeping costs down
By Missy Wood, director of business services, Lake Havasu Unified School District
There seems to be some controversy surrounding the School District and the wellness clinic that was opened recently by the Lake Havasu School District Benefits Trust. I wanted to take this opportunity to share with the community the District’s excitement in being a part of this endeavor.
First a little background about the Trust. In 1986, the School District started paying the Trust the premiums it had been paying outside vendors for insurance products. A separate board of community members, a staff member and a retiree would comprise the Trust Board and although the District would have no direct oversight of the management, which was no different than with paying an outside insurance company, what it would do was eliminate a for profit insurance company and thus save dollars.
Over the years, as we are all aware of, the costs for benefits have risen. The Trust Board has done a phenomenal job of complying with laws, providing for the best benefits possible with limited funding and has been able to maintain the same premium amount, $400 per month per employee, for the past five years. The challenge has been to provide for medical, dental, vision, prescription drugs and a small life insurance policy all for $400 per month. They have accomplished that and now more.
We all know that on the national level, health care has been a very controversial issue. In 2014, those employers with 50 or more employees will be required to provide health insurance for their employees. Health care is currently 17.6% of the GDP. We also know that if we continue to do everything as we have, we won’t be able to expect any different results except greater expenses to cover rising health care costs.
We also know that medicine as we know it today is reactive and not proactive, we don’t seek out medical assistance until we have to and sometimes, not even then. When the Trust mentioned raising the premiums, as the Business Manager for the District, I cringed. The District started out this fiscal year, July 1st with approximately $11,000,000 less than it had five years ago. The Trust decided to look into other models of providing health care, to become proactive rather to try to manage to the reactive medical model currently used by our Country. This was a well thought out process and involved looking into those companies that had instituted wellness centers and how they worked and what kind of results the Trust could expect.
The Trust had an actuary do a study and found that a savings of approximately $1,000,000 could be realized between 3-5 years if the Trust opened a wellness clinic. That savings at the Trust level meant that our $400 per month per employee cost for benefits might just last another 5 years at the District level.
Although this concept is not new in some States such as Florida, where they are leading the Country in this endeavor, it is new to our State and our City. After reading this, should you have any questions regarding this or any other financial issue related to the District, please feel free to come by or give me a call (928-505-6936) at the District to discuss. (7/26/12)