Westport schools' health insurance financing gets high marks
Published 12:46 pm, Thursday, January 19, 2012
As top town officials continue to scrutinize public employee benefits packages, the Westport school district is outpacing other area school systems in savings on education workers' health-care costs, according to one of the town's insurance consultants.
The school district's conversion in September 2010 from Anthem Blue Cross to Cigna as its employee health-insurance provider catalyzed a series of savings, said Robert Pernicka, senior vice president of the Segal Co. during a Tuesday presentation to the Board of Education and Board of Finance
Switching school employee insurance from Anthem Blue Cross to Cigna coverage has saved the district approximately $700,000, Pernicka said. Cigna's negotiation of greater discounts with hospitals contributed to those cost efficiencies, he added.
"Cigna provides the same level of benefits for a better price," Pernicka said of the school district's switch.
Employee health benefits annually comprise a major share of the Board of Education's operating budget. This year's budget allocates about $12.65 million for employee health-insurance, which accounts for about 13 percent of 2011-12 operational education spending.
Health-insurance spending in Superintendent of Schools Elliott Landon's proposed 2012-13 budget would increase by less than 1 percent to $12.75 million.
During the last three years, school employees' claims have risen by an annual average of about 3 percent, Pernicka said. Other comparable public sector health-care plans, he added, had experienced average claims increases of 8 to 9 percent during the last three years.
"You've been aggressive in negotiations," Pernicka added. "You probably have some of the highest co-pays for municipal groups for prescription drugs. You've taken steps in cost-sharing with employees in plan design. "
A lack of "catastrophic" or high-cost claims incurred by the school district had also helped to limit the school district's health-care expenditures, Pernicka said.
Neither the Board of Education nor the Board of Finance took any votes Tuesday. The school board is scheduled to vote on Landon's proposed budget early next month, while the finance panel will review and vote on the 2012-13 school spending package in March.
The finance board last year cut $250,000 from the 2011-12 education budget, a reduction that went uncontested by the Board of Education.
Board of Finance Chairman Avi Kaner praised the education board Tuesday for tamping down employee health-care costs.
"The fact that you've been able to keep these expenses in check using these various mechanisms is very commendable," he said. "I remember how difficult it was when you took the courageous step of actually switching carriers, which I'm sure was a very unpopular thing to do."