Butler Health Plan in 2013
By the numbers
13 school districts enrolled in BHP
5,000 school employees (down from 6,800 in 2010)
13,000 people covered with spouses and families added
12.7 percent increase for single, family PPO plans
94 cents of every $1 collected goes to pay a claim
$70 million annual budget
Source: Stephanie Hearn, executive director, BHP
All Butler County schools enrolled in a countywide health care consortium are facing a 12 percent hike in insurance premiums for the upcoming calendar year.
Butler Health Plan, a self-funded medical and dental plan consisting of 13 school districts, voted Oct. 19 to increase medical rates by 12.7 percent in 2013 for single and family Preferred Provider Organization plans. The nonprofit plan has also eliminated its Employee+1 plan option, while maintaining single and family plans, according to Stephanie Hearn, BHP executive director.
Many districts were budgeting for increases between 9 percent and 10 percent in 2013 before the rates were announced via email Oct. 22, officials said. The increases have averaged about 7 percent over the past decade, Hearn said.
“In 2012 there were more claims per member and more higher-cost claims,” Hearn said, explaining the reasoning for the 12.7 percent increase.
After the 2013 rates were announced, the Lakota Local School District — a founding member of BHP in 1985 — terminated its 27-year relationship with BHP after the higher rates would have meant an additional $3 million next year, said Lakota Treasurer Jenni Logan.
Nationally, the average annual premiums for employer-sponsored health insurance in 2012 rose by 3 percent for single coverage and 4 percent for family coverage, as compared to 2011, according to the 2012 Employer Health Benefits Survey by the Kaiser Family Foundation — a non-profit, private operating foundation focusing on major health care issues in the U.S.
In Hamilton, Treasurer Robert Hancock said the 12.7 percent hike could end up being an actual increase of about 16.5 percent once open enrollment is completed and the district can assess how many of the 153 workers on the Employee+1 plan switched to family or opted not to use BHP anymore.
Employees in the Hamilton district contribute 15 percent of insurance premiums, Hancock said, which amounted to $1.4 million of the total $9.2 million spent in 2011. He anticipates the district’s annual insurance costs rising about $729,000 next year.
“We’ve been battling health care increases for 15 years,” Hancock said. “It’s hard to pinpoint when it hits taxpayers. But it’s less money we can use to spend on other priorities.”
Logan said the Lakota district’s total insurance costs were $13.8 million last year — with 85 percent board share and employees contributing 15 percent, based on union negotiations.
“Back in the summer, being proactive, we got quotes from insurance carriers on what it would look like if we went out on our own,” Logan said. “At that time in the summer those rate increases looked like they were going to be higher than what BHP had indicated our rates would be, and so we didn’t take any more action.”
The Lakota school board held an emergency meeting Oct. 31 to withdraw from BHP, due to a 60-day notification deadline before the new rates effective Jan. 1, 2013. The school board then approved Nov. 2 a two-year contract with Anthem Blue Cross Blue Shield to provide insurance for $15.8 million in 2013.
Logan said 268 employees — 22 percent of the workforce — would’ve been impacted by the Employee+1 plan being eliminated. She said the 12.7 percent rate increase would actually translate into a 23 percent increase after those impacted workers were moved to a family plan.
“When we see a higher increase than the national trend, it’s a red flag and we have to do something about it,” Logan said. “We’re a public entity and have to answer to taxpayers. Everyday we’re aware of where our money comes from and we’re trying to be prudent with those tax dollars.”
Hearn said BHP decided to fold the Employee+1 plan into the family plan because both were generating the same number of claims each year.
Prior to approving the new contract with Anthem, Lakota officials met with union representatives to announce the new insurance carrier. Sharon Mays, president of the Lakota Education Association representing teachers, said she’s confident it will be a smooth transition to Anthem because all three plans — employee, employee+1 and family — will be maintained.
“We are aware of the district’s financial constraints and appreciate whatever efforts are made by the (school) board to curtail expenses,” Mays said.
Hearn said Lakota is the second school district to vacate from BHP this year after Edgewood City Schools withdrew at the beginning of the year. Hearn added that within the past two years, Sycamore Community Schools joined.
Hearn said the organization now provides health care to about 5,000 employees, down from about 6,800 in 2010.
Current plan members are: Butler County Educational Service Center, Butler Technology & Career Development Schools, Butler County Board of Developmental Disabilities, Fairfield City, Great Oaks Institute of Technology and Career Development, Hamilton City, Madison Local, Middletown City, Monroe Local, New Miami Local, Ross Local, Sycamore Community and Talawanda.
Hearn said the remaining members enrolled in BHP shouldn’t feel any impact on rates due to the loss of Lakota. She said rates are determined by the previous year’s claims, and some years the rate increases have been less than 2 percent.
“BHP has been a successful organization for 27 years,” Hearn said. “We have lower than market premiums and annual increases.”
Hancock said there are benefits in enrolling in a self-funded plan, such as school districts having representation on the BHP board and a stake in the decision-making.
“If it’s a good year we get to keep the money we didn’t spend,” Hancock said. “(Insurance rates) are cyclical; it’s always going to be like that.”
Randy Stiver, treasurer of Edgewood schools, said the district withdrew from BHP in November 2011, not out of unhappiness with the consortium, but because of a desire by Edgewood employees to have more local control in designing their plans.
Stiver said Edgewood also contracted with Anthem, and recorded a savings of $100,000 in the first six months.
Officials at Fairfield and Middletown schools, Butler County Educational Service Center and Butler County Board of Developmental Disabilities have also expressed amounts ranging from an additional $350,000 to $500,000 in the coming year.
“The (increased) dollar amounts are ranges depending on the employee’s choice of plans,” said Kelley Thorpe, Middletown treasurer. “The difference for a family plan on the PPO option will be an additional $156 per month or $1,872 per year for total premium.”
Rick Black, chief financial officer for Butler County Board of Developmental Disabilities, said the 12.7 percent increase will translate to an additional $500,000 for his office next year — nearly $300,000 more than expected.
“It has an impact on our budget, and is one of the things we’ll have to work through in 2013,” Black said. “It’s too late for us to change; the rates came in last week (Oct. 22). It’s not enough time to go with another plan.”
Black said the Board of Developmental Disabilities — which pays about $2.1 million annually in insurance — has about 200 employees impacted by this insurance hike. All employees contribute 10 percent of premiums.
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