NOSD to soften blow of health insurance cost hikes

Health insurance premiums are increasing for employees of the Northern Ozaukee School District, but the School Board is trying to make that pocketbook hit a little less painful.

The board last week approved increasing the district’s contribution toward employee health plans by 25%.

The School District stopped offering group health insurance in July 2024, the start of the last fiscal year, and moved to an Individual Contribution Health Reimbursement Account (ICHRA) that a third party manages.

That allows employees to shop the marketplace to pick out their own health insurance plans and receive contributions from the district to help pay for their premiums.

“We give them money on a card and they pay their own premiums,” Director of Business Services Josh McDaniel said.

The contribution increase was driven by market costs, he said.

Last year, more than 82% of the district’s employees selected a plan from either UnitedHealthcare or Blue Cross Blue Shield. After marketplace premiums rose by 10% to 12% last year, the district offered 7.5% toward employees’ plans.

This year, UnitedHealthcare is seeking premium increases of 29.5% to 37%, he said, and it was similar with Blue Cross Blue Shield.

“Over 80% of our employees who elect a plan are going to experience a very significant increase if they stay with their plan,” McDaniel said.

Beyond those increases, the district would be paying more if it was tied to a carrier since they charge administrative costs.

The cost of a family plan differs by factors such as age of the employee and their children, and which county the family lives in, McDaniel said.

The 25% suggested increase, which the Finance, Buildings and Grounds Committee discussed last month, also helps balance the district’s overall benefits package, McDaniel said. The district is “pushing the envelope on health insurance” with ICHRA, and the boost gives employees some resources.

Employees and their families are offered assistance from a third-party administrator to help navigate the marketplace. Some employees, McDaniel said, may choose to take a plan offered by their spouse’s company and receive a $6,000 waiver from the district.

Before switching to ICHRA, the district paid $1.1 million in premiums, but a few high-cost claims brought the bill to $1.3 million to $1.5 million in expenditures, McDaniel said, which is why the district received high renewal costs. Allowing employees to pick their plans on the open market means high claims costs don’t affect the district, he said.

He said he has heard that the state has approved rates for health insurance carriers but hasn’t seen anything public. Plans need to be finalized by the end of the month due to Affordable Care Act requirements that call for the marketplace to be open in November for next year’s enrollment.

“It’s hard to budget for it. We’re just trying to make the best decision that we can to provide the best plan for employees,” McDaniel said.

“These are big numbers but they’re all around us. I don’t know what we can do about it,” board Vice President Dan Large said.