For the first time since July 2021, Mission CISD’s self-funded health insurance fund is not in a deficit and sits at a positive $73,887. Although the total amount is in flux, the district has been working to overcome what was once a $1.5 million deficit in November 2021.
Mission CISD was able to put the fund back in the positive in July 2021 because administration and the board of trustees opted to transfer monies from the general fund to cover the deficit expenses. However, Assistant Superintendent for Finance Joel Garcia said the district cannot rely on the general fund as not a long-term solution. So, district leaders had to make adjustments.
The way a self-funded health insurance plan works — as opposed to a fully-funded plan — is the employer and the employee each contribute a designated amount to the program to make it self-sustaining. In a fully-funded plan, the employer contracts a third-party insurer to assume financial responsibility for all claims and costs. In a self-funded plan, the employer (in this case, Mission CISD) assumes financial responsibility.
Mission CISD entered into a deficit mostly because of high-cost claimants, which made up 54 percent of the medical expenditures at one point. And according to the assistant superintendent of finance, there could be a correlation between COVID-19 and the increased expenditures, which is why the district entered the deficit when it did. But as of May, Mission CISD has received about $1.5 million in revenues when it comes to stop-loss. Stop-loss, or excess insurance, is insurance that protects against large claims. The district gets reimbursed when a claim reaches or exceeds a certain amount.
With the help of stop-loss reimbursements, insurance consultants and a series of adjustments, Mission CISD has been able to get the fund balance back in the black.
Since February, the district has implemented immediate action items to help reduce the deficit, including changing the prescription benefits with little to no disruption to members, which generated a savings of $205,793. The district is also looking at possibly increasing employer contribution to the fund for the upcoming school year. Currently, MCISD contributes about $450 a month per employee.
Other pending action items include a direct contract with a hospital for possible discounts and ensuring the benefit plan is relevant to industry standards. Director of Risk Management Sylvia Cruz is also working on a three-year strategic plan with consultants from Carlisle Insurance, Blue Cross Blue Shield and Jeff Everitt & Associates to remain proactive and keep the self-funded health insurance fund in the positive.
“We understand that the vision of the district is to make sure that our employees are healthy. If our teachers are healthy, everything goes well. We’ll have less interruption to instruction, less substitutes and things like that,” Cruz said. “So our goal and vision is to make sure that our employees are healthy. And with that in mind, we’re going to work on that three-year strategic plan, and employ all our resources, and get together and collaborate to make sure that we’re working together for our staff.”