WSWHE Health Insurance Consortium
In 2006, the directors of the WSWHE Counties Health Insurance Consortium (who are district superintendents in the WSWHE BOCES supervisory area), authorized the creation of a 501(c)9 not-for-profit Trust that receives health insurance premiums from its member school districts and pays claims to Empire Blue Cross on behalf of Consortium participants. It also created a Benefit Coordination Office to:
- Processes and maintains client enrollment applications
- Enforces health insurance carrier's eligibility requirements
- Coordinates preparation and mailing of monthly billing statements
- Oversees monthly carrier reconciliations and premium payment to the insurance carrier
- Provides notification on any contract changes
- Works closely with component school districts' administrators to ensure timely, accurate, and cost-effective service for the consortium
- Manages retiree drug subsidy (RDS) processing
- Manages and provides notification regarding Medicare
- Manages student status and sends notifications to clients
- Distributes COBRA and FMLA notifications
- Implements special projects as needed upon request
The establishment of the Trust and Benefits Coordination Office enabled the Consortium to move to a minimum premium plan, whereby actual claims are paid through the Trust fund as they occur. This process eliminates the premium tax that New York State obligated Empire Blue Cross to pay when it was recognized as a public company and results in a savings of $1.3+ million every year. Under this paradigm, collected premiums that are not needed to pay claims are returned to the Trust fund, along with prescription drug rebates and discounts that total approximately $3.4+ million annually.
The Consortium's claims experience is less than what it pays in premiums, enabling it to build a surplus. The surplus is used as a rate stabilization fund to offset a bad year or reduce the next year’s rate increase. The Consortium also earns interest on the surplus. Health insurance renewal rates are based on the Consortium’s actual claims history, not on statewide averages. This results in a cost-savings in contractual benefits. The Consortium's experience is predictable, resulting in fewer claims than the average company.
The WSWHE Counties Health Insurance Consortium collects over $125 million in health insurance premiums per year from 30 member school districts and the WSWHE BOCES. Through its Benefit Coordination Office, the Trust processes and maintains 8,900 client contracts representing approximately 18,600 lives.
With contractual salaries and benefits constituting a large portion of the budget, the Consortium constantly looks for creative ways to reduce costs. The WSWHE Counties Health Insurance Consortium efforts provide school districts with an immediate return of surplus healthcare insurance dollars, receipt of prescription drug rebates/discounts, and improved control over premium renewals through the use of a rate stabilization reserve fund.
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