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Valley Schools Management Group Study Session

December 3, 2013

Ken Hicks, CFO

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• Valley Schools Insurance Trust and Workers Compensation Pool– Financial Summary– Operational Summary

• Valley Schools Employee Benefit Trust– Financial Summary– Operational Summary– Summary of FY2014 Plan Changes

• Valley Schools Management Group– Financials

Overview

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VSIT-Financials

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VSWCP-Financials

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• When things go wrong• Why self insurance• Services provided• Insurance market overview• Excess insurance premiums

VSIT and VSWCP

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• VSIT loss run• Cost of risk• General and auto liability• Workers compensation• Student injuries

VSIT and VSWCP

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QUESTIONS AND DISCUSSIONVSIT AND VSWCP

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VSEBT-Financials

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Self Insured Claims =Medical +Pharmacy85% - 90%

Fixed Expenses

10% - 15%

Background/OverviewVSEBT Contribution (Premium) Breakdown

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• Compare like programs to accurately evaluate fixed expenses.– Self-Insured – School Districts– UnitedHealthcare– NOT participating in a Trust

or Pool

Fixed Expenses• Medical

Administration• Prescription Drug

Administration• Stop Loss Coverage• EAP/Managed Care• COBRA Services• Consulting

Background/OverviewVSEBT Fixed Expense Fee Comparison

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District 1 & 2 Monthly Average $57.49PUSD Rate $53.04PEPM Savings $ 4.45PUSD Average Monthly Enrollment Count 2,874Total Annual Savings on Fixed Expenses $153,471

• The above PEPM rates have not been adjusted for differences in stop loss levels, pharmacy rebates or other contractual terms

• The above do not include dental, vision and life insurance savings

• The two Districts identified above is data from the FY2012-13.

Background/OverviewFY 2012-13 Fixed Expense Comparison/Annual Savings

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• Peoria Unified - $389• Deer Valley Unified - $444• Paradise Valley Unified - $362• AVG of 15 Self Funded Members - $343

Per Member Per Month (PMPM) Comparisons

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In 2013, the District had 28% reduction in total costs • Fixed expenses were reduced 23% to $1.8

million from $2.4; result of reduction in monthly average of employees on the plan

• Plan changes last year shifted enrollment to CDHP plans

Summary of Plan Changes

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• Bring parity to different health care plan design options• Reduce Health Savings Account (HSA) contributions • Modest increase to Traditional Plan buy up• All retirees moved to the ASRS retiree health care

program• Adding an additional dental plan and moving Delta

Dental to a dental buy-up option • Voluntary:

– Short Term Disability – Life Insurance for all Staff

Summary of Plan Changes

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QUESTIONS AND DISCUSSIONSValley Schools Employee Benefit Trust

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Valley Schools Management Group

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QUESTIONS AND DISCUSSIONValley Schools Management Group