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February 02, 2006
Michigan School District switches to Health Savings Account plan
Whitehall District Schools in Michigan has taken a major step to get its health insurance costs under control and stabilize the budget for the next three years.
The board of education approved a switch in health insurance plans for the district’s administrative staff to a Health Savings Account. Administrators will no longer be covered by MESSA but will have health insurance through a high deductible health insurance plan.
“Many districts will look at this option next year,” Christine Annese, assistant superintendent for Whitehall District Schools, said.
According to a news release, the new HSA plans will save the district nearly 22% in insurance costs. The savings from the change will allow the board of education to provide three percent salary increases to administrators each year for the next three years without increasing the amount that would be budgeted for administrators’ salaries and health insurance.
Annese said the district projected it would have spent $882,000 for administrators’ health insurance over the next three years under MESSA, but will now only spend $660,000 with the health savings accounts.
Whitehall District Schools said it will be the first public school district in Muskegon County to implement this type of health insurance policy similar to what the business community has used to reduce health insurance costs.
To offset the high deductibles, the administrators will have health care savings accounts which provide pre-tax dollars for out of pocket health care costs. Those dollars, if unused, can roll into the following year and continue until retirement.
Annese said the health savings accounts may provide additional funds for the administrators after retirement. “We hope administrators will see this as a chance to save for health care costs at retirement,” she said.
The release said the district will be able to hold the cost of administration salaries and health insurance through 2008 simply by moving health insurance cost savings into salary. The goal of the plan switch was to find a creative way to provide the security of good health insurance and still offer reasonable salary increases.
Annese said the administrators have met several times to listen to alternative health insurance plan presentations. After listening to all the plan presentations, they decided on health savings accounts as their best option to cut costs, provide proper health coverage, give their employees an opportunity to save for retirement, and promote a more healthy style of living.
Posted by Wiley Long at February 2, 2006 09:20 AM