In November 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.
In December 2006, WSWHE BOCES approved the creation of a Benefit Coordination Office to process and maintain client enrollment applications, invoice member school districts, and oversee monthly carrier reconciliations and payment to the insurance carrier.
Within the first 16 months of implementation, these actions resulted in new levels of savings for school districts.
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 $750,000 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 $105 million in health insurance premiums per year from 29 member school districts and the WSWHE BOCES. Through its Benefit Coordination Office, the Trust processes and maintains 9,200 client contracts representing approximately 22,000 lives.
“With contractual salaries and benefits constituting a large portion of the budget, we constantly look for creative ways to reduce costs,” said Tim Lawson, superintendent of Warrensburg Central School District and chair of the Health Insurance Trust. “Our 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.”
Please contact us if you have any questions:
Christine Burke, Chief Financial Officer and
Chairperson of the WSWHE Counties Health Insurance Consortium
10 LaCrosse Street, Suite 6
Hudson Falls, NY 12839
Phone: (518) 746-3320
Fax: (518) 746-3309