NEWTOWN SQUARE–A presentation was held at the last Marple Newtown School Board meeting on Jan. 22 for the Delaware County Public Schools Healthcare Trust consortium.
The healthcare trust consortium aims to manage health insurance costs over both the short term and long term to eventually become a self-insured trust.
Delaware County Intermediate Unit's (DCIU) Executive Director Larry O'Shea and Tom Belmont, president at consulting firm Gallagher Benefit Services, presented the school board directors with a proposition to join the county healthcare consortium with other school districts.
- 14 public schools in Delaware County, including Marple Newtown School District, as well as the DCIU
- 8,465 covered employees
- 20,118 covered lives
- Approximately $100M in estimated annual claims expense
- Insurance carrier is Independence Blue Cross
According to the consortium: "The Delaware County Schools Affiliation fully insures their health care to transfer risk to the insurance company and to maintain a fixed, predictable budget for these benefit costs."
Several school board members shared their concerns over the risks and liability to joining the consortium.
"My biggest concern is that this trust–fundamentally, I understand the benefit of it, I understand the uncertainty of it which makes us a little uncomfortable–is made up of a number of school districts that are in either receivership or in very thin financial straits, or some that are about to go in that same direction," said School Board member Jim Lanzalotto. "We're aligning ourselves with a series of districts that we don't want to be aligned with, frankly, because this is not those types of towns. We would much prefer to align ourselves with districts that are financially solid today and tomorrow."
According to O'Shea, if a school district doesn't put in their share to the consortium, the district will be placed on a 30-day warning to pay or they will get kicked out of the trust. And if the district still does not pay, the state will then get involved, according to O'Shea.
School board members requested more data and trend reports gathered over the years on health insurance plans for Delaware County school districts, including Marple Newtown's standing against other school districts, as well as more data and amount of savings gathered on the health consortium over the past 20 years, or when the consortium was established.
"That's the crux of the issue," said School Board member Robert Sack. "I know you analyzed all of the districts and your logic is based on everyone joining them. But for us to make a decision for this district, we need to know exactly the effect on this district. To me, I don't know how you make a decision without that."
O'Shea responded that the consortium indeed cannot predict the future. "We are dealing with a statistical process and overtime, the more bodies that you have and more lives that are covered in this, statistically, it reduces the impact of paying one of those lives facing some catastrophic disease." But, over the course of time, that will flatten and even out, added O'Shea.
If the district does not join the first year of the healthcare trust, then the district would have to buy in its share, if there is a reserve. The district needs to provide an answer to the consortium by Jan. 31, in order for the trust to file by the end of February. The consortium is expected to be implemented by July 1.