Insurance switch may help to fill Naugatuck school budget gap
By: Health Insurance
Submitted: 2009-12-15 10:07:57 | Word Count: 370
The Board of Education has begun its campaign to persuade all school employees to buy into a new health insurance plan that it says will save almost $900,000 this year.
The board is banking on that plan to help make up a projected $2 million budget shortfall for the fiscal year that ends in June.
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The board's proposal, which it posted on its Web site Wednesday, calls for all employees to switch from either a traditional health insurance plan or a health savings account, which the employee owns, to a health reimbursement account, owned by the school system.
According to the board, among the benefits to employees is that the school system proposes to pay the entire deductible — $2,500 for singles and $5,000 for family plans — through the reimbursement account. The major benefit to the school system is that funds only need to be paid when a claim is incurred and unused funds can be rolled over from year to year.
A major reason for the board's projected deficit is high health insurance costs. The board has a self-funded plan, which means it pays for all medical costs incurred, and has set aside $8.3 million, with no reserve account, to pay claims this year.
The board already has spent about $5 million on health claims with seven months to go in the fiscal year. Officials project the insurance account will be underfunded by $700,000 to $1.5 million by the end of June.
The reimbursement account approach, which would be provided by Anthem Lumenos, is the board's answer to that problem.
According to board documents, which were written by the board's insurance broker, employees would use account dollars to pay for medical care and Anthem Blue Cross & Blue Shield would reimburse the school system after reimbursement account funds are spent.
