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Putnam Valley Board of Ed Eyes Second Largest Portion of Annual Budget
Health benefit rates expected to rise 7-8 percent annually over the next four years
by Margaret Sternberg
With an eye toward future budgets, the Putnam Valley Board of Education spent its December 6, 2007 meeting hearing from Dr. Thomas Higgins and David Stern from the BOCES-run Putnam/Northern Westchester Health Benefits Consortium.
The Board had requested the presentation in an effort to educate itself and to find out how the district's health benefits costs are managed since, after teachers' salaries, health benefits not only make up the largest portion of the district's budget, but are also an increasingly greater percentage of the budget.
During their 45-minute presentation, Higgins and Stern presented a history of the self-funded health plan, its advantages and disadvantages, its governance and an overview of who uses it, which in this case is a number of school districts in Westchester and Putnam Counties.
Over the next four years, rates are expected to rise 7-8 percent annually compounded, approximately a 50 percent increase over the years 1993 - 2007, during which the average increase in the consortium rates for health benefits was 5.5 percent, compared with a national average of 8.12 percent.
While most districts in the consortium have been paying in the range of $15,000 to $16,000, and Putnam Valley paying $13,980, putting it at the low end of the scale, Bedford and Ossining, both of which are not in the consortium, respectively paid $13,509 and $13,824. Carmel, which is also not a member of the consortium paid the highest premium, at $18,838.
The speakers noted that two districts which had left the consortium were considering returning and that it was unknown whether the benefits of the independently insured districts were comparable to those in the consortium.
School Board President Tina Mackay said that the presentation served to put a higher level of scrutiny on the item of health benefits costs in the district's budget, which in turn helps steer the discussion toward ways in which the district could save money and evaluate options. Some changes that have already been considered - and some implemented - are health incentives, a three-tier drug co-pay, a higher deductible, and an added co-pay.
The consortium's current provider is Aetna, whose contract expires June 30, 2008. The consortium will go out for an RFP (request for proposal) next year. In 2001, when it first became the consortium's provider, Aetna provided the most extensive network of doctors, offered the best rates and had the best administrative costs Higgins and Stern indicated.
Superintendent Dr. Marc Space said that looking at the benefits program ensures that "the district not only [is] benefit[ting] employees, but is being responsible stewards of public funds and providing transparency through dissemination of the material being provided."
The next meeting of the Putnam Valley Board of Education will be Thursday, December 20, at 7pm.
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