School district eyes 5% health insurance rate increases for 2027
The Burnsville-Eagan-Savage School District reviewed its self-funded medical and dental insurance plans on April 9, finding rising costs that will require funding increases to maintain coverage for employees and their families.
District officials presented a detailed analysis of the 2025-2026 health insurance plans and recommended a 5% funding increase for both medical and dental coverage in 2026-2027. The recommendations were discussed during a work session but no official vote was taken.
The medical plan faces particular pressure from rising prescription drug costs and mental health claims. According to George Vander Weit, an insurance representative with One Digital, pharmacy expenses account for 25% of the plan's spending, while mental health claims jumped 9% to $1.1 million. The district also has three individual claimants whose medical costs each exceed $1 million. The plan's reserve fund currently sits at 48.7%, below the district's 55% target.
Stacey Sovine, the district's executive director of administrative services, explained the rationale for the increase: "With the continued rising costs of medical and prescription drugs not slowing, the need to adjust rates to cover expenses is what drives the recommendation for an increase to funding of 5%." Additionally, stop-loss premiums—insurance that protects against catastrophically high claims—are projected to rise 17%.
The dental plan is in better financial shape. Claims are stabilizing, and reserves stand at 43.3%, exceeding the 25% target. However, the district still recommends a 5% funding increase for 2026-2027 to account for a 5.9% increase in administrative rates charged by Delta Dental.
No formal action was taken at the April 9 meeting, as this was a work session designed to review the plans and discuss recommendations. The district will likely take official action on these funding proposals at a future meeting.
This story was created by artificial intelligence (a large language model) based on the proceedings captured in the video below.
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Burnsville Eagan Savage School District #191 Self-Funded Dental Plan Review and Funding Recommendations
▸Meeting Analysis
“Pharmacy represents 25% of the health plan spend at $195 PMPM. Mental health claims continue represent over $1.1 million of spend, up 9%.”
“With the continued rising costs of medical and prescription drugs not slowing, the need to adjust rates to cover expenses is what drives the recommendation for an increase to funding of 5%.”
“Stop premiums will increase by 17% thanks to the stop loss premium cap.”
“Funding recommendation is to increase rates 5% for 2026-27.”
▸Source Document
---
## title: Microsoft PowerPoint - Board Meeting.pptx
## author: George Vander Weit
date: D:20260402150136-05'00'
---
## Work session: Insurance Plan Review
April 9, 2026
Stacey Sovine, executive director of administrative services
George Vander Weit, One Digital Insurance Representative.
Believe, Belong, Build and Become.
## Burnsville Eagan Savage School District #191
2025-2026Medical and Dental Plan Review and 2026-2027funding recommendations
## 2025–2026Self Funding Medical (Through March2026)
Actual –3/2026Projected
## $13,207,456$23,727,495Medical Plan Claims
## (Net Stop Loss Violations)
$671,941$2,388,214Fixed Costs
## $13,879,397$25,814,721Total Plan Costs
$17,158,122$27,947,622Internal Funding
## $14,004,717$12,600,369Total Running Reserve Estimate
54.2%48.7%Reserveas % of annual costs
•Target Reserve: 55% of annual costs
## 2025–2026Self Funding Medical: Reserve Estimate
•Prior Reserve represents the
estimated reserve position at the end
of 6/30/25
•Projected Reserve At Expected is what
the reserve projection is given current
funding levels had claims been exactly
equal to expected medical claim
projections
•Actual Total Reserve is our reserve
position plan year to date
•Target Reserve is 55% of annual costs
## Reserve
$10,725,991
$14,640,538
## Feb-26,
$14,004,717
$13,088,150
## K
## $ 5.M
## $ 10.M
## $ 15.M
## $ 20.M
## $ 25.M
## $ 30.M
## Prior ReserveProjected Reserve At Expected
## Actual Total Reserve55% of Total Costs
History of Reserve balance
•Net ending position of self funded health plan per District Financial statements:
TargetChange in valueBalanceFiscal Ending
$8,405,544$9,066,555June 302020
$8,649,470($610,924)$8,455,631 June 302021
$9,309,463($1,105,171)$7,350,460June 302022
$10,907,833($1,914,409)$5,436,051June 302023
$11,457,917$2,200,196$7,636,247June 302024
$12,002,450$1,340,626$8,976,873June 302025
•Pharmacy represents 25% of the health plan spend at $195 PMPM
•Mental health claims continue represent over $1.1 million of spend, up 9%
•3 high cost claimants with each over $1 million in spend in the past 12 months
•High-cost claimants continue to represent over 18% of spend over the past 3 years.
The severity of the claims in number and dollar value over stop loss are improving but
this has created higher stop loss premiums over the past few years
•With the continued rising costs of medical and prescription drugs not slowing, the
need to adjust rates to cover expenses is what drives the recommendation for an
increase to funding of 5%
Health plan observations and funding recommendation for 2026-27
## 2026–2027Self Funding Medical Projection of Costs
## Projected
## $25,031,467Medical Plan Claims
## (Net Stop Loss Violations)
$1,927,805Fixed Costs
## (Less Pharmacy Rebates)
## $26,959,272Total Plan Costs
$27,428,758Internal Funding
## $14,940,538Total Running Reserve Estimate
55.4%Reserveas % of annual costs
•Target Reserve: 55% of annual costs
•BCBS administrative rate will remain at current rate.
•Stop premiums will increase by 17% thanks to the stop loss premium cap
•Plan has a $250k individual deductible with a 115% aggregate contract
•OneDigital consulting fee is a fixed annual fee of $75,000 and will not be
changing
## 2026–2027Self Funding Year Medical Projection
•Prior Reserve represents the projected
reserve position for claims incurred
through 6/30/26and paid through
12/31/26
•Projected Reserve At Expected is what
the reserve projection is given renewal
funding levels if claims are exactly equal
to expected medical claim projections
for plan year 7/1/26–6/30/27
•Minimum Reserve is 11% of annual
costs
•Target Reserve is 55% of annual costs
## 2025–2026Self Funding Dental (Through February2026)
Actual –2/2026Projected
## $602,993$904,489Dental Plan Claims
$40,617$60,925Fixed Costs
## $643,610$965,415Total Plan Costs
$587,559$881,339Internal Funding
## $446,113$418,088Total Running Reserve Estimate
46.2%43.3%Reserveas % of annual costs
•Target Reserve: 25% of annual costs
## 2026–2027Self Funding Dental Projection of Costs
## Projected
## $940,492Dental Plan Claims
$65,367Fixed Costs
## $1,005,859Total Plan Costs
$925,405Internal Funding
## $337,634Total Running Reserve Estimate
33.5%Reserveas % of annual costs
•Target Reserve: 25% of annual costs
•Delta administrative rate will increase by 5.9%
History of Reserve balance, claims and 2026-27funding
recommendation
•Net position of self funded dental plan per District Financial statements
–June 302020: $449,155
–June 302021: $460,555
–June 302022: $497,197
–June 302023: $525,883
–June 302024: $514,893
–June 302025: $481,786
–Claims are stabilizing
–Funding recommendation is to increaserates 5% for 2026-27
This story was created by artificial intelligence (a large language model) based on the proceedings captured in the video below.
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