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Hilltown Archives — The Altamont Enterprise, March 31, 2011

Will BKW use BOCES as its health-insurance broker?

By Zach Simeone

BERNE — In looking to cut costs while not shorting employees’ health-insurance benefits, Berne-Knox-Westerlo is learning more about joining a coalition of districts that uses the Board of Cooperative Educational Services as its insurance broker.

“The current system, I would say, is very fragmented, very loosely managed,” said Dana Piazza, benefits administrator for BOCES’s New York State Municipal Benefit Coalition. “Because of that fragmentation, we’re not really combining our efforts. A lot of that is because of how it’s been in the past, either they’d work directly to get insurance, or they’d secure a broker. With that fragmentation, there’s really no strategy, and no push to affect the trend.”

She also said that people should change the way they think about health insurance costs.

“People focus on things like co-pays, and there’s only so much you can do with that,” said Piazza. “The bigger expense has to do with behavior, and whether or not people are taking advantage of some of the preventive tools that are out there. That’s become sort of secondary.” People “react to health insurance needs,” she said, rather than engaging the different aspects of health insurance.

Further, Piazza emphasized that the intent of BOCES is not to reduce benefits, but rather to get employees into “correctly placed programs,” which she then tied back to the importance of changing behavior.

At a meeting earlier this month, the BKW School Board was paid a visit by Piazza, as well as Robert Zordon, director of human resources for Capital Region BOCES, and Mark Jones, the assistant district superintendent for management services, who briefed the board on some of the benefits to joining the coalition. Piazza will be at the school board’s April 11 meeting for further discussion on BKW’s potential involvement.

The district’s health insurance premiums for the 2010-11 school year total $3.8 million, of which 91 percent is paid by the district.

So 18 percent of BKW’s budget — $3.5 million out of $19.6 million — is for health-insurance for district employees; the Guilderland Central School District is paying $10.2 million of its $87.5 million budget — 12 percent; the Bethlehem Central School District is paying $10.4 million out of its $88.3 million budget — 12 percent. The Voorheesville School District, closer in size to BKW than Guilderland and Bethlehem, pays $2.7 million out of its $21.7 million budget — also 12 percent.

Guilderland employees for years have paid 20 percent of their health-insurance costs, while the district pays 80 percent.

The BKW board decided in late February to take a closer look at costs, options, and possible changes to how it handles health-insurance benefits for its employees.

Kevin Callagy, BKW’s business official, later added that all three of BKW’s insurance carriers — Blue Cross and Blue Shield, CDPHP, and Mohawk Valley Plan — are all projecting “double-digit increases” for the 2011-12 school year.

Municipal benefit

BKW gets its health insurance through a consortium of several districts, some of which were on the brink of joining the BOCES coalition earlier this month, Piazza told the school board; when asked later which districts she was referring to, Piazza and Jones declined to name them before their membership in the coalition had become “solidified.”

The Municipal Benefit Coalition essentially offers three services:

— A cooperative service agreement in which BOCES acts as a third-party administrator, a liaison between the district and its insurance carriers, costing the district $7 per enrolled employee per month, with menu pricing also available, and this cost is BOCES aidable;

— Consultative services, included in the $7 per enrolled employee per month; and

— Putting out a request for proposals for a joint pharmacy, at no charge.

According to BOCES, districts pay an average $12 per employee per month, though Jones said this is neither a state nor national average.

“It’s our exposure to the information we’ve seen,” Jones said. “Some products are served or managed via a commission that’s built into the product…All health plans aren’t service priced in the exact same way. It takes the total dollars in the health insurance product relationship, and divides it by the number of employees per month.”

Neither BKW’s business official nor its superintendent could provide off hand a number for the average cost per employee per month. “But there’s a consulting fee that we pay to Benetech,” Callagy said, “which I believe is about $4,700, but there are other fees that are built into our premium that are not reflected in that necessarily.”

Modifying behavior

“We’re trying to establish a model where we set up the right infrastructure,” Piazza told The Enterprise, “so that some guidance and strategy can be given, not just to individual districts with labor and management situations; our intent is to get people more educated, to open communications, to create transparency, and set a strategic path so we can sustain benefits.”

She went on, “To do that, we really need to become much more unified in our approach to dealing with the carriers, dealing with union representation, and even communication within the districts where we’ve seen turnover in leadership.”

There’s a disparity, she said, “Between the old, traditional indemnity-type plans that may not be the best thing for the more active healthy population, and younger families. We want to make sure that we have a product that makes sense, and that people are using them appropriately when they’re young enough to modify behavior. A lot of times, if they’re older, indemnity-type plans, that doesn’t include all the types of services that would be preventive.”

As the district nears the end of this year’s budget process, taxpayers will have a chance to learn more about the Municipal Benefit Coalition at the April 11 meeting, and ask questions about if and how these changes may affect them.

“Obviously, some of this is formative,” Piazza concluded. “I’m very familiar with products on the market right now, and we’re hoping to work across multiple districts, both on the labor and management sides, looking at plans with the carriers, and what would be the best-practice product model for this population, from the cradle to the grave.”

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