Switch in health insurance carriers for Humboldt teachers, staff beneficial in long run
Some families will experience initial higher costs
Teachers and staff in the Humboldt Unified School District (HUSD) will be covered by a different health insurance company this coming school year. The HUSD Governing Board approved the change at its April 9 meeting at Bradshaw Mountain Middle School.
The district joins the Prescott Unified School District’s (PUSD) plan to contract with Kairos Health Arizona, a statewide public entity health pool with more than 11,300 members.
For the past 12 years, HUSD and PUSD were members of the Yavapai Unified Employee Benefit Trust (YUEBT) that included about 950 members from both districts.
“Over the years, the Trust has experienced solid performance when compared to the national insurance premium averages,” HUSD Finance Director Cynthia Windham stated in her memo to the board. “However, over the last two years, the Trust has had several ‘large’ claims that have adversely affected our insurance ratings.”
Because of the small size of the insurance pool, the impact of these high medical claims on rates are significant, she added. Recent meetings with the Trust resulted in a proposed premium increase of 28.5 percent. Both districts looked into other options and both recommended Kairos.
“The ‘strength in numbers’ will help mitigate future increases because the risk is spread amongst more individuals, and we significantly improve our collective purchasing power,” Windham stated.
Kairos’ coverage includes an initial 22 percent increase in premiums because the district has been “significantly underfunded,” she added. Existing Kairos members experienced rate increases of 3 and 5 percent over the past two years.
The switch to Kairos has other consequences, some positive, some that create a hardship in the first year for certain participants.
In the past, the district paid YUEBT premiums for 100 employees who waived coverage. Kairos will not require this. Kairos offers more choices with five different coverage plans. It is staying with Blue Cross/Blue Shield, will add access to Mayo Clinic, and is considered in-network nationwide.
School representatives of the Humboldt Meet and Confer Committee unanimously voted to shift insurance companies to Kairos, Streeter said.
The downside is the out-of-pocket cost for a segment of employees. Coverage for the 470 employees-only will see less out-of-pocket costs, as will the employees-plus-spouse.
The 45 employees-plus-children and the 27 employees-plus-family will see an increase. Kairos Executive Director John Ashton said these two categories had been subsidized over the years, and Kairos will try to minimize the impact over future years.
Streeter acknowledged that the change will affect his family with the immediate inconvenience of higher rates, but looking to the next five years, “it will put us better in the long term,” he said.
Windham confirmed that the impact to those being hit is less than the impact if the district stayed with YUEBT.
Board President Ryan Gray praised the collaboration between districts. “The ability to make the transition is because our administration and PUSD worked together,” he said.
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