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School spends $7 million
annually on benefits

by Ivan Foley
Landmark editor

For the first time in three years, the Park Hill School District is conducting a bidding process for insurance carriers for the district’s employee benefits program.

Dr. Paul Kelly, assistant superintendent, explained at a recent school board meeting that the district is submitting requests for proposals (RFP) for each employee benefit program in order to secure benefit carriers and funding options effective for a Jan. 1, 2016 renewal date.

The district is considering both tradition and non-traditional approaches to what it says are the rising costs of health coverage.

Currently, Park Hill spends about $7 million annually on its employee benefit program.

The employee benefit programs include the following:
•Medical Insurance
•Dental Insurance
•Vision Insurance
•Life and Accidental Death and Dismemberment (AD&D) Insurance
•Voluntary Life and Accidental Death and Dismemberment (AD&D) Insurance
•Long-term Disability Insurance
•Voluntary Long-term Disability Insurance
•Section 125 Flexible Spending Accounts

The school district says it last bid these programs in the summer of 2012 and the school board approved three year agreements with the current carriers effective Jan. 1, 2013.
•Medical - Blue Cross/Blue Shield of Kansas City
•Dental - Delta Dental
•Vision - VSP
•Life and Accidental Death and Dismemberment (AD&D) Insurance - USAble
•Long-term Disability Insurance - CIGNA
•Voluntary Long-term Disability Insurance – CIGNA
•Voluntary Life and Accidental Death and Dismemberment (AD&D) Insurance - USAble
•Section 125 Flexible Spending Accounts - Wage Works

Kelly said the objective of the RFP process will be to identify among multiple proposals the best employee benefit program with the most effective price for all lines of coverage.

“All traditional and non-traditional approaches to providing a quality employee benefit program at an affordable cost will be considered. This includes approaches submitted by known carriers, Third-Party Administrators (TPAs), or consortiums,” Kelly said in a report to the board.

The RFP will be submitted to known carriers, TPAs and consortiums. Proposals will be returned to the school district, and evaluated by district staff, members of the district Insurance Advisory Committee, and the district's benefit consultant (CBIZ).

Required components of proposals will include, but are not limited to, the following. Carriers, Third-Party-Administrators (TPAs) and consortiums will be required to:

•Document and demonstrate successful experience working with school districts or public entities.
•Demonstrate familiarity with provider networks (doctors, hospitals) in greater Kansas City area or demonstrate experience and competence at the creation and management of pharmacy/benefit networks, on-site clinics, Accountable Care Organizations (ACO), etc.
•Design a scope of employee benefits consistent with the current Park Hill School District benefit plan design and/or to design a unique plan considerate of current/future district resources.
•Submit two pricing proposals (1) Pricing excluding (net of) all commission/compensation agreement for an insurance broker/consultant (2) Pricing including a commission/compensation agreement for an insurance broker/consultant.
•Propose medical, dental and vision benefit programs utilizing an array of funding mechanisms, including but not limited to fully insured programs through fully self-funded programs.

Evaluation Process & Criteria
Kelly told the school board that proposals will be analyzed by district staff, members of the district Insurance Advisory Committee and the district's benefit consultant (CBIZ), using the following parameters:
•Cost. What is the overall cost of the benefit to the district and employee? What are the short-term costs, potential long-term costs?
•Benefit. What is the scope of the benefits being offered and how does the plan design change from the current plan?
•Network of Providers. Based on plan usage history, does the network of providers (hospitals, doctors) within the plan represent providers that district employees use and prefer? How many employees would be required to change providers if moving to a new plan (crossover)?
•Employee Wellness Initiatives. Do the carrier/TPA/consortium have incentives for preventive care and employee wellness initiatives in order to avoid the possibility of larger claims?
•Administration of Claims. Can the carrier/TPA/consortium provide reliable, consistent and fair administration of claims? Does the carrier/TPA/consortium have data/technology systems that reliably integrate employee data, receive premiums, and that can provide data sets back to the district for analysis?