Rob Fitzpatrick, the Board of Education’s consultant for health benefits, provided educators with a preliminary overview of next year’s health care budget and signaled that the recent transition from Cigna to Aetna would yield only positive results for a district that covers hundreds of teachers, nurses, secretaries, and administrators.
“Ridgefield is better than every district in Fairfield County on health insurance, and I can say that with complete assuredness because I work with a lot of schools in the area and a lot are nowhere close to where you’re at,” Mr. Fitzpatrick said, referring to cost of insuring staff.
“A lot of credit goes to the workforce for doing their jobs and keeping educated about the new coverage plan — employees know how to use the plan and make it work to their advantage.”
The district has kept insurance costs “very flat” over the last five-year period, despite instability in the economy.
Mr. Fitzpatrick acknowledged that there had been a significant number of “large claims” that had increased over the last three years — 83, 87 and 94 from 2010-11 to 2012-13.
Despite this, the district is projecting only a 3.1% budget increase in health benefits — up slightly from the 2.84% increase last year, which resulted in a $13,343,581 insurance budget for the 2013-14 school year.
“That 3.1% is a good number to use to predict what future benefits budgets will look like,” Mr. Fitzpatrick said. “We’d be completely flat this year without taxes.”
He added the district could see big savings from tax reductions in 2016, estimating as much as $40 to $45 per employee per pay cycle.
Mr. Fitzpatrick recommended that the district shift away from its commercially insured plans, where the employer pays a premium to an insurance company for a certain package of health benefits, toward a self-insured model, where the employer pays for all health care directly instead of paying anything out to an insurance company.
He noted that the downside of this change would be that if the cost of care ends up higher than predicted, the district would have to cover the remaining cost.
“We’d have to develop a reserve fund of about $5 to $6 million, something similar to the one the town has,” he said.
As for the health care costs, Mr. Fitzpatrick said there would be no double-digit rate increase as was proposed before the switch to Aetna earlier in the year.
Cigna’s initial figure was a 14% increase in March for 2013-14, whereas Aetna projected an increase as low as 7% in May, but that will more than likely rise closer to 9% for this year, according to Mr. Fitzpatrick.
During the meeting, Mr. Fitzpatrick also presented an overview of pertinent sections of the Affordable Care Act, known as Obamacare.
He stressed that the district must offer insurance to 95% of its full-time staff or it would be subject to heavy taxes.
In addition, he circled liability and affordability as two key areas for the board to review and focus on in the future.
“You must meet the affordability criteria every year,” he cautioned. “If you don’t, you can end up getting taxed $3,000 per employee per year — and that’s a situation we’d all like to avoid, I’m sure.”
Date: December 31, 2013