Daniel T. Connor
Superintendent

227 Main Street
Goshen, NY 10924
(845) 615-6720

Budget News

District's self-funded health plan defies trend of double-digit premium hikes

January 28, 2011 - During a time when health insurance premium hikes are in the double digits, the Goshen Central School District’s widely used health insurance plan, the Orange-Ulster School District Health Plan, is looking at a premium increase of only 1% for next year.

The Orange-Ulster School District Health Plan is a self-funded plan that’s been in operation for approximately 30 years. Several years ago, area school districts in Orange County formed their own health insurance plan in order to offer employees health insurance coverage at a lower cost to them – and the school district.

So how is this possible? The self-funded Orange-Ulster plan uses a third party administrator, INDECS Corporation based out of Lyndhurst, New Jersey, to negotiate for lower costs through Blue Cross/Blue Shield. Districts are then able to control insurance premiums by eliminating additional costs associated with insurance companies’ profit margin and aren’t subject to conflicting state health insurance regulations and benefit mandates, which are federally mandated.

Each participating school district has one employee on the plan’s board of directors, and board members have been able to establish a benefit model that meets membership needs at a lower cost. The district has more control over the benefit plan and can customize it and can also control health plan reserves. Essentially, the district doesn’t have to subscribe to a “package” offered by a private insurance company, allowing it to control coverage and premiums, and manage costs when necessary – such as during a weakened economy.

Over the years, the district has negotiated with its unions to offer this plan, with employees paying a percentage of their premium. While private health insurance premium rates are increasing drastically, the Orange-Ulster plan is able to keep its rates low – last year’s premium increase was only 2%.

In a nutshell, the stability of the Orange-Ulster plan allows the district to better budget for its health insurance premiums – and avoid the skyrocketing premium hikes of national insurance companies that are affecting districts throughout the state.

For instance, the district also offers MVP to its employees. Costs for the two plans used to be about even, but MVP has seen a premium increase of 6-14% over the past two years, with national trends in the double digits. If an employee chooses MVP over the Orange-Ulster plan, he or she must pay the difference between the two premiums. This has caused a big shift to the Orange-Ulster plan –approximately 95% of employees are enrolled – and this hasn’t gone unnoticed.

“Because we have a good plan in place, districts from other areas want to mimic or join us,” said Assistant Superintendent for Business Robert Miller. “At this point in time, we’re a model and people are looking to us to see what we’re doing so they can apply it to their own districts.”