Third-party insurance administrator chosen by Cape school board

The Cape Girardeau School Board on Monday approved going with a third-party administrator to implement a partially self-insured plan to offer medical coverage to its employees.

Mutual Medical Plans Inc. of Peoria, Illinois, was selected as the administrator.

Assistant superintendent for administrative services Neil Glass said the plan design, provider access and answers about deductibles, copays and the plan structure will be brought back to the board after Mutual Medical talks to Southeast Hospital and Saint Francis Medical Center.

A partially self-insured plan means the district could limit its risk per individual and employee, but also limit its risk per aggregate of Cape Girardeau School District employees. It keeps insurance free to the district's 731 employees.

Employees must be enrolled by Jan. 1.

Under the plan proposed Monday, the district would pay a certain amount and then reinsurance would kick in. Reinsurance is like buying a policy with a large carrier that says a person will pay up to a particular amount and the company will cover the rest.

The partially self-insured plan would include Southeast Hospital, but not Saint Francis Medical Center. Board members wanted to approach both hospitals to see what kind of deal can be arranged.

Board vice president Jeff Glenn said he would like to see what the plan would look like with a buy-up option and without one.

Glass said about 18 percent of employees, or a little more than 100, take advantage of the buy-up, which covers Saint Francis.

Board president Kyle McDonald said he wanted to see why those 18 percent chose the buy-up option and whether they took advantage of it, if possible.

In the past, the district has chosen a fully insured plan, which meant the network and administration of that network was all inclusive, Glass said.

"We've chosen tonight to take a different route and that's to hire an administrator of the plan and to pay the claims from a school district standpoint instead of paying a full insurer to pay those claims," he said.

Mutual Medical will administer the plan and help design it as far as deductibles, copays and all the charges and costs involved in a plan. "They'll offer advice and suggestions on how the plan will look. We'll take it to the Salary and Welfare Committee [of the Community Teachers Association] and get their thoughts and opinions and recommend something to the board," Glass said.

He said Healthlink, a preferred provider organization, is the insurance plan he believes the district is going to use and would include all St. Louis hospitals.

Mutual Medical will send claims to the district, telling it what the funds are needed for. The firm also will have an auditor review each claim that comes in.

"They'll assess the claims and look over the bills to make sure they're accurate and that they're following the contract, and if they are, they submit that claim for payment and we pay them," Glass said.

Glass said he has $4.6 million budgeted for employee health insurance this year.

"My goal is to maintain that $4.6 million and not exceed that, and that's what those gentlemen [from Mutual Medical Plans] were saying tonight. We would issue stop-loss insurance that would not exceed the $4.6 million," he said.

The $4.6 million is a $400,000, or 8 percent, increase from last year. But Glass said the plan discussed Monday would save the district -- conservatively -- $600,000 over last year.

Glass said he talked to several administrators and county officials who had success with partially self-insured medical plans. Cape Girardeau County has gone to one, as has the Jefferson City, Missouri, School District.

"They say self-insurance is a great way to go," Glass said.

Last year, the board approved a "narrow network" plan offered by Anthem Blue Cross/Blue Shield to cut costs. The decision saved the district $317,000 for 2014.

The plan excluded Saint Francis Medical Center from the district's insurance network unless employees were willing to pay $40 more per month.

Current Anthem plans remained the same, but without the option of going to Saint Francis Medical Center, Barnes-Jewish Hospital in St. Louis or facilities owned and operated by those hospitals, according to information from the district. It includes Southeast Hospital and other hospitals in St. Louis.

rcampbell@semissourian.com

388-3639

Pertinent address:

301 N. Clark Ave., Cape Girardeau, Mo.