[14:51] [Music] [15:10] Good evening. I would like to call to order this Anoka Henipin special school board meeting for today, May 12th, 2025. [15:16] Please join the board in pledging our allegiance to the flag of the United [15:24] States of America and to the stands. [15:29] nation under God, indivisible, with liberty and justice for all. [15:41] Our first order of business is to approve the school board agenda. Is there a motion to approve the agenda as [15:46] presented? So moved. With a motion from Director Simon. Is there a second? Second. Oh, thank you, Coacher Arco. Uh, [15:54] any discussion? Hearing none. All in favor of approving the board agenda say I. I. [15:59] I. Any opposed say nay. With six in favor and zero opposed. The agenda is [16:04] approved. Our next item is item four, labor relations and benefits setting [16:11] health insurance premiums/ rates which is set for approval tonight. We welcome [16:16] Dr. Jennifer Cherry, executive director of human resources and Todd Mensing, director of labor relations and [16:22] benefits. Thank you. [16:30] Good evening, co-chair Dashaine, members of the board, Superintendent McIntyre, [16:36] uh uh Director Meninkin and I are here this evening to share with you [16:42] information about our district insurance plans and recommend rates for the [16:49] 2526 plan year. uh just a little uh information about uh [16:57] our insurance plans and information that we do receive from stakeholders. We do [17:02] have an insurance advisory committee uh that uh assists in reviewing this [17:08] information with us. I we have about 26 20 almost 30 people on our insurance [17:15] advisory committee. Um and we have representation from all of our employee [17:21] groups. Again, those stakeholders come together on a regular basis. Um [17:26] approximately five times a year uh to continually um provide input and review [17:33] uh the status of our insurance plans. And with that, we'll hand it over to [17:39] Todd and he'll walk through our presentation for us. Right. Good evening, uh, co-chairs Arco [17:45] and Dashaine, members of the board, Superintendent McIntyre. Uh, to start, as a self-insured district, uh, we pay [17:53] our own insurance claims and set our own premium rates. Uh, so if we were to [17:58] purchase uh, insurance uh, off of the market, we would be given premiums. uh [18:04] because we're self-insured, we need to set those premiums in order to cover our expenses uh and ma maintain an [18:10] acceptable reserve to cover any variance in claims or runout expenses we we [18:15] incur. Uh we have consultants at AON who provide analysis to establish rate [18:20] recommendations. Uh we work very closely with an actuary uh on this information [18:27] and our um claims projections, administrative fees, stop-loss insurance, rebates, discounts and and [18:33] other costs associated with administering the plan are included in their [18:40] analysis. Uh we'll start by looking at dental rates. Uh so this uh shows uh some [18:48] underwriting information on our dental plan. Um, as you can see, we have we have a little over $5 million in uh [18:56] dental uh aggregate paid claims every year. Um, uh, and uh, currently our [19:04] dental rates are $85 with the district contributing 80 and employees contributing $5. We haven't increased [19:11] the dental rates in several years because we have a very, very healthy fund balance. um that fund balance. Uh [19:20] so so we've been setting the rates uh lower than than uh normally required to [19:26] spend down that fund fund balance, which was still at about uh 1.6 million and it [19:32] really only needs to be about a quarter of that uh as of last year. If we don't [19:37] increase the rates this year, um we'll we'll fall behind the um you know the the recommended fund balance. So, we're [19:45] recommending a $5 increase in the dental insurance uh uh rates this year. If you [19:51] move to the next slide, um yeah, so this just highlights uh our recommendation [19:58] um is that we increase dental rates by $5 a month to $90 uh for this [20:04] year. Moving on to health insurance rates. Uh and this is really the bigger issue. [20:11] Uh on this slide you see our current insurance plans. Uh so we have one kind [20:18] of Cadillac plan, the choice co-pay plan that has no deductible, an open access [20:23] network. You just pay a $25 to $100 co-pay uh when you need to go in and [20:28] access care. Uh you can see we have a little over 700 single and 200 family [20:34] members on this plan. Uh, and then we have three plans that utilize this deductible 8020 plan design. So there's [20:42] a $1,500 single and $3,000 family deductible. Uh, and once you hit that [20:48] deductible, there's co- insurance of 20% until people reach their out-ofpocket [20:53] maximum, which is 3,000 for single and 6,000 for family. Uh, of these three [20:59] plans, the one that's uh, used most often is the choice 8020 plan. right now. When we went to United Healthcare, [21:06] they didn't have a network equivalent to Elect, which has Alina, Riverway, and [21:12] Park Nichollet. Alina's by far the largest uh provider in our area. Um, and [21:18] so we saw some movement to elect last year, but the rates were set very close and and uh we had more people deciding [21:25] to to stay on the choice open access network. And then Vantage Plus is our [21:30] least expensive plan. Again, it has that same plan design but utilizes M Health Fairview uh [21:38] network. Uh here's uh uh so this is the executive summary from AON uh dealing [21:45] with medical pricing um and the status quo. Um so the forecast forecasted [21:50] increase required is a a 22% increase um in total premiums uh per employee per [21:57] month. that comes to about $295 or $15.3 million. Uh so currently [22:05] uh our I at our current premiums we're projected to um get about 68 million uh [22:12] dollars and then that extra 15 million's needed um to get us to 83 which is where [22:18] we uh need to be in order to uh maintain a solvent plan. uh going into this uh [22:25] the market trends there are showing the inflationary factors we're looking at. So medical claims um are going up 8% [22:33] this year. Uh pharmacy claims 13. So the overall trend is [22:39] 9.3%. In the past that trend was closer to 6 to 7. So part of the reason for [22:44] this rate increase is that the cost of medical care is coming going up faster than uh previously. Uh a a few key [22:53] observations here are that drug trends continue to increase um due to specialty medications and GLP-1s. Uh GLP1s are uh [23:02] generally for weight loss or or diabetes. Um it's a new class of drugs um that uh is contributing to our our [23:10] higher uh rates. um experience in the second half of the last plan year [23:16] deteriorated badly and in a upcoming slide we'll show what that looked like. [23:21] Um and that the other thing is the last plan year was an outlier in terms of high claims um the severity of claims. [23:29] We had 11 members with costs over 500,000 and 26 with costs over [23:35] 250,000. Um so we were hit uh particularly hard last year. Um we and [23:42] our our claims appear to have leveled off a little bit but they they uh haven't been going down. Um in terms of [23:50] method methodology um they used his historical data to forecast our expected [23:56] claims um and um you know we look at a point in time and project [24:03] forward. If you go to the next slide, uh this slide shows the historical claims [24:09] trend. Uh and if you look at those red arrows, um they kind of show that. So, [24:15] so we're using claims through February. Uh and that's kind of what we do every [24:21] year as we set claims. We bring them to the board in April for prior uh for the [24:26] um first reading and then usually the first board meeting in May for the uh [24:32] the final reading. Um, and you can see last year, uh, we we had, uh, there [24:38] there started to be a spike there, um, with the February claims. Um, but it wasn't clear if that was a, uh, a moment [24:46] in time and and claims kept going up. So, we saw a 20% trend last year. [24:53] Actually, you know, rates went up 20% over the the prior year. We had set our rates a little below 10%. Uh so there's [25:00] a there there was a real unexpected increase um in the last year and it [25:06] really started just as and and really took off just as we set rates a year ago. Can I pause for just to just add a [25:14] little bit more commentary? This is a really important slide for us to understand our our claims when we find [25:20] this information at what point in time and then how we project forward. Right? [25:26] So what we see here with the light blue bar is uh two years ago. So we were uh [25:33] with UHC at that time. Now we're with Medicica. Um but we used that [25:39] information at that point in time in February of 23. We still had six more [25:45] months of of data or claims that were coming in after the rates had already [25:51] been set based on what we projected that year to look like. So with that first [25:57] red arrow, that's where we were setting uh claims for the next plan year, which [26:03] you see in the blue um the blue box there, UHC year 2. Um when we set uh the [26:10] claims in um February of 24, that red arrow right there, we were setting uh [26:18] rates based on just information up until that point. What you see there is a a [26:24] pretty large progressive increase in claims in the next six months. We didn't [26:30] know that information um that our claims were going to come in so high. And so [26:37] last year, had we known that the claims were going to continue to increase, we [26:44] might have set our premiums higher last year, too. So now we're kind of playing [26:49] catch-up. Uh so we've had to um spend down some reserves to help um pay out [26:54] those claims. So now what you see on the last bar there, February of 25th, uh [27:00] February of 25, that's the point in time we have this amount of claims data now [27:06] and we're setting premiums for next year. We're using history to project [27:12] forward where we're going to go. And so, um, if that, as you can see, our claims [27:18] have started to level out a little bit, but, um, we're trying to project forward. Is that trend line going to [27:25] continue to increase or are we going to level out or are we going to dip back down to where we had, uh, been in [27:30] previous years. So those are all factors that we're considering and we want to [27:36] again ensure that our premiums are set at a rate where we can continue to fund [27:42] the claims as they come in next year. And that's the the really the actuarial [27:47] that helps us um uh determine uh our best projections. [27:55] All right, if we move to the next uh slide, this shows our internal service fund. Uh so this is uh the uh it's fund [28:04] 20. Uh so we this is where we collect our premiums. We put them in this fund and then and then we pay all of our [28:10] expenses out of it as well for the uh and this is only looking at health. Um there's a portion of fund 20 that's set [28:17] aside for dental and for workers comp insurance as well. Uh but you'll notice [28:22] uh through time we have the the blue and red lines which are expense and revenue and they ran um largely hand inand we [28:30] tended to increase our rates uh to to a similar amount uh as what expenses went [28:36] up. Uh if you look at the green line at the bottom that shows uh where our [28:41] reserve is and then the two dotted blue lines show the range that uh AON says [28:48] that we should try and maintain which is 24 to 30% of variable expenses. Uh and [28:55] if you look at 2023 you'll note we're right in the middle of that range. when [29:00] we set rates in 2023 uh for 2024 uh like we had said using [29:07] claims through February, we were anticipating that it would lead to uh [29:13] still being in the middle of that range um in 2024 and we saw it dip to the bottom of [29:19] the range um because of that experience at the end of the fiscal year. And then [29:24] this year we saw, you know, a a precipitous dis decline as those uh [29:30] those rates continued to increase. So uh we're now actually below the point um [29:36] where our incurred. So um if you look at that 24 to 30% about 10% of it needs to [29:43] be to cover incurred but not reported claims, claims that we've incurred but have not yet paid. um and and we're [29:51] actually below that that portion. Uh and then the remainder is there to really cover variance in claims. So um it's [29:58] because we had the fund balance available. Um you know otherwise we [30:04] would be borrowing from the general fund right now uh in order to to fund the health [30:11] fund. If you move to the next slide. Uh so this is a called a waterfall chart [30:18] and this uh I identifies what went into uh the the projected increase here. So [30:25] again the trend um is that medical and RX trend at 8.7%. [30:31] Um and so 9.3% on claims um results in an 8.7% increase to premiums because [30:39] there's other costs um associated with the claims or admin fees and stop-loss [30:44] insurance that that aren't included in that. Our stop-loss insurance is uh is [30:51] insurance we hold to cover any claims over $500,000. Uh and we also have aggregate [30:57] stop-loss which will cover um all of our claims if we exceed 125% of expected [31:05] claims. Uh we just so you know Medicica when they set our aggregate stop loss [31:11] also was not expecting our claims to go up that much. Um so we're actually uh [31:17] projecting to get somewhere near that uh 25% near than we've ever been uh before. [31:23] I still don't anticipate we'll actually need to use aggregate stop-loss. Uh but the stop loss had a 14% increase uh [31:32] negotiated into our 2-year contract. Uh and so the the that 14% increase [31:37] represents a half a percent. Um our admin fees are are were set with no [31:44] increase uh for the two years. And there are also some credits included uh about [31:49] $512,000 worth of credits um each year in the plan. So that um isn't included [31:55] in these costs as a as a reduction. Uh if you look at the the the big uh cost [32:01] here is the experience gain or loss. Uh so that's where we are 9.7% higher than [32:07] what we were anticipating a year ago. And so we need to um you know move up to [32:14] being able to fully fund and and then uh cover that inflationary increase. Uh and [32:21] then there's also 4% built in for reserve load. Uh so you know ideally [32:26] we'd like to get to that 24 to 30% but we can't do it all in one year. Um, so the strategy is over several years, um, [32:34] we'll we'll try and build in, uh, that 4% to try and get up, uh, back up to to [32:41] where our reserve is [32:47] healthy. All right. Uh, next, uh, just want to talk a little bit about cost containment considerations. Uh so AON [32:55] came to us with a number of options that could reduce the uh the the increase in [33:02] premiums by uh reducing the benefits on the plan. Um so here you see sort of a a [33:09] variety of different options. Um starting with making uh prescription drug co-pays subject to deductible. [33:16] Currently they're not. Um but that's only a 3%. Um and and then they gave [33:21] examples of increasing prescription drug po co-pays. Um three different options for increasing uh deductibles and [33:29] out-of- pocket maximums. Um and then uh increasing that co insurance from 20 to [33:36] 30%. Um so and then they if you see scenario number seven is combining sort [33:41] of all of those cost-saving measures and it would represent about a 3% reduction [33:47] in the amount that needs uh an increase. The other thing uh we looked at was the [33:52] removal of GLP1 coverage for weight loss. Um so GLP1s are a fairly new uh [33:59] strain of drugs. They've been around about uh three years. Um and and they're [34:06] really hitting all plans right now um that that have them. And so we looked at [34:11] uh and brought to our committee the possibility of um eliminating GLP1 [34:17] coverage for weight loss. Our plan has always covered weight loss drugs. Uh but this uh these are new weight loss drugs [34:24] that are more effective um than than others. And most people aren't taking them just to lose weight. They're taking [34:30] it because they have sleep apnea or some other condition um where losing weight would would assist them with it. Um so [34:38] uh AON came to the committee uh and shared these different options. If you want to move to the next uh slide, we [34:45] can talk about it. Um so overall premiums again like I said [34:50] need to increase by 22% or 154.4 million to cover expenses. Um the [34:57] plan design changes including the elimination of GLP1 coverage um and and [35:03] those increases to out-of- pocket costs were shared with our insurance committee as options to offset some of the [35:09] premium. our our committee members sought input from their respective employee groups um before providing [35:15] additional feedback with administration via Google form and we didn't have consensus uh from our bargaining groups [35:22] about implementing uh any of these plan design changes to reduce the value of benefits uh by state statute. So you're [35:30] aware uh we can't reduce the aggregate value of benefits. It's a negotiated [35:35] item. Uh the statute says we can't reduce that aggregate value without the agreement of all bargaining groups. Uh [35:42] and so it was administration's um opinion that we we well and and from the [35:48] feedback we got we we didn't uh feel that we would be able to get um every bargaining group to sign off on this. Um [35:55] so our our suggestion is to um keep the plans as is uh and increase the [36:03] um the co-pays. The concern would be if we did implement those changes. Just a [36:09] second. You just said increase the co-pays. Oh, I'm sorry. Increase the premiums. Yeah. The concern would be if [36:15] we did increase the co-pays or we did cut the GLP1 coverage, we could have a grievance that would require us to go [36:22] back and um still provide that coverage and then we would have set our our uh [36:27] premiums so that they wouldn't cover them. Uh so we we don't suggest taking that risk. [36:37] All right. So, moving on to our rate recommendation. Uh uh so for I'll start [36:44] with our current health insurance premiums. Um so at the top you can see our single plan. So our most expensive [36:52] single plan is $1,20 a month. Our least expensive one is [36:57] $810. And the current district contribution for all groups is $810 uh [37:03] for all groups with a fixed contribution. Uh and so there you can see the employee share per month. Uh and [37:09] then our employees uh have their insurance taken out over 20 paychecks during the school year. And so there you [37:17] can see the per paycheck amount employees are paying is between 0 and $126 for single. And that means that the [37:25] district is covering between 79 and 100% of the cost for singles. If you go down [37:32] to families, you can see um the the premiums are between 27.80 and 21105 a [37:38] month or 21105 and 27.80. And we currently have a district contribution of [37:45] $1,515. Um, so the employee contribution ranges from $590 to [37:51] $1,265 depending on plan. And on a per paycheck amount, that's $354 to [37:58] $756. Uh, and then you can see as well that so the district is covering between [38:03] 54 and 72% of the premium uh for [38:09] family. Moving to the next slide. Um, currently the district negotiated a [38:16] 5% increase to health insurance premiums with those bargaining groups whose contracts were settled last year. Um, so [38:24] the single contribution went up to 850, the family contribution to [38:29] 1590. And they also all have a dual spouse benefit where if a two uh [38:36] employees are married to each other, they essentially get the single plus the family contribution. [38:41] Um, we have eight bargaining groups currently o with open contracts. Uh, and [38:47] they may or may not end up agreeing to this standard contribution shown above. So, we're using it for um demon [38:54] demonstrative purposes. Uh, but it's possible uh these other groups uh might [39:00] want to negotiate more on insurance and less on salaries or um or you know or [39:07] negotiate less on insurance and more on salaries. So, um, since we still have those eight open contracts, uh, we can't [39:14] necessarily say where everyone will land, but this is, um, we're going to use these amounts just because if if, [39:21] uh, people settle for the budgeted amount, um, this is what it would look [39:27] like. So, if we move to the next slide, um, we're we're offering two options. [39:33] Uh, one is a 22% increase uh, to all plans. Uh, one thing I'll note is that [39:39] 22% increases to the overall premium because the district pays a larger [39:45] portion of the premium than the employee. And because the district contribution isn't set to go up by as [39:51] much, that means the percent increase the employee is going to see is going to be higher than this uh the the increases [39:59] we're we're looking at. Um, we're providing two options here. Uh option one is uh a flat 22% increased all [40:06] plans. Option two would increase the choice plans by 23% and the elect and [40:12] vantage plus plans by 20%. Um the the rationale behind that is that there's a [40:19] suggested decrement between our plans. U so the the elect plan is supposed to be [40:24] 6 to 7% less expensive than the choice plan. That's how much it's projected to [40:30] save when people move from choice to elect. And Vantage Plus is supposed to be 2 to 3% lower than uh elect. Uh and [40:38] so by increasing those lower plans by a little less than the high plans, we can [40:44] get that same um total dollar amount. Uh but we will um get closer to that [40:52] decrement we're looking at between plans. and it will give people an option for [40:57] uh to move to those lower plans and have a smaller [41:03] increase. Uh so this uh slide shows uh option one. Um, so you can see uh the [41:11] increase of 22% would result in single premiums going uh up to 990 to [41:19] $1,245 and family premiums from $2570 to $3,390 a month. Uh, and you can see uh [41:28] the district share is that 850 and 1590 we shared on the previous slide. Um, so [41:34] that leaves the employee share uh for single uh going up to $140 to $395 a [41:41] month and the uh and for family up to 980 to $1,800 a month. Uh and then you [41:49] can see what that is on a per paycheck basis and the total change per check. [41:55] Um, so if you look uh up at the single plans, you can see uh the the choice [42:01] co-pay, they'll be up to 237. It's $111 per check. So um it's it's a sizable uh [42:09] increase. Vantage plus820. They were at zero. Now they'll be at 84. So there's an $84 increase. Um [42:18] and I if you you look at the share of the premium paid by each uh on the on the previous slide I believe we were [42:24] running from about 80 to 100% district um uh with the uh the current budgeted [42:31] amount uh this would be more uh like 68 to 86% for single and for families 47 to [42:39] 62% uh covered by the district. Uh the next slide here you'll [42:46] see option two. Uh so uh this option is to increase the choice by slightly more [42:52] than elect. Uh because we have more people on choice right now. Um you only [42:58] need a 1% increase in choice uh to pay for a 2% increase in elect a 2% cut in [43:04] elect and and Vantage plus. Um so here we have in we have uh increases from 970 [43:12] to 1255 for single. um and increases to 2520 to 3,420 for family. Um and if you [43:20] move over, you can see the per check amounts. Uh uh you can see the uh [43:26] district share and employee share and and you know, we put in red that change per check because we think that's [43:31] probably the most important thing um you know that we need to consider the impact [43:36] it has on the employees. Uh so this would be a 72 to $117 increase per check [43:42] for employees. um uh for single and between 204 and 339 [43:49] for family. Uh and you have very similar because the these rates aren't a whole lot different than option one. The [43:56] percent paid by the dis district is fairly [44:02] similar. All right. The district administration is recommending uh [44:07] recommending increasing the vantage and elect plans less than the choice plans uh in order to provide a lower priced [44:14] option while also bringing the plans closer to that suggested cost decrement. [44:20] Um we again uh we think in introducing plan design changes that may result in a [44:25] reduction in the aggregate value of benefits is not recommended um without the consensus of all bargaining groups. [44:33] And that may be something we could look at in the future as we have more conversations with our uh our insurance [44:40] advisory committee. Um, so, uh, moving forward, our next [44:47] step, our open enrollment is scheduled May 27th, uh, to June 11th. Uh, our open [44:53] enrollment materials actually need to get to the print shop, uh, tomorrow in order to, um, to make that timeline. Uh, [45:00] and then our insurance uh, uh, year starts September 1st. So, this is kind [45:07] of always what we've done is have the uh, open enrollment just before school gets out. Um, so, uh, we can get the [45:15] communication to employees while they're still here and I not gone over the summer. Uh, and then the the new plan [45:21] year starts right with the beginning of the new school year. So, this this final slide um just [45:28] shows our final rate recommendation. Uh, so again, we're we're recommending that option two. Uh, and you can see the [45:35] rates right here. Uh we're also recommending the dental rate uh be be [45:41] set at $90. Our dental plan's a little different. It's uh um combined. It it [45:47] costs the same for single or family. [45:53] And with that, this is our recommendation again board. Uh we are looking at um uh approving looking for [46:01] approval of our monthly premiums uh for each of these plans for both singles and [46:07] families. At this time we are not um asking for uh board consensus or board [46:14] direction on district contribution towards those premiums. At this time it's really about rate setting of our [46:21] premiums. And so with that, we're open to any questions or comments that you might have. [46:28] Um, and hoping Thank you, uh, Director Odette. [46:33] Thank you. Um, I have a couple, uh, questions. So, the first um I just saw [46:39] it in the news today that President Trump signed an executive order that seems to have the um potential to [46:45] significantly reduce the price of prescription medication, which you know, if it did, [46:53] um could obviously have a significant impact on the price of the drug drug [46:59] benefits. And I'm sure people might wonder how could that affect the rates [47:07] for this year? And um and so I guess I I had I'm going to [47:12] connect that to um and I want to make sure I understand. So for the the fact that our bargaining groups weren't able [47:18] to consense on uh removal of GLP1 coverage, I it's for [47:24] that reason that we we don't see that as an option in the what was presented. Right. And but you said perhaps in the [47:31] future if that so maybe because the two things are sort of similar in the fact [47:36] like in the future how might you see in the future is does that mean we'd have to wait [47:43] until the next plan year um in the case of the GL if that GLP1 coverage got [47:48] consensus and now we're talk a little more hypothetical if this executive [47:53] order were to impact drug prices might that have to also wait [47:58] until the next plan year. Has has there been a case before where we in the middle of a plan year made any changes [48:04] to the rates? We've never made changes in the middle of the plan year. I I would anticipate [48:10] if if that those measures were effective, it would make it so there's not such a Yeah. steep trend next year. [48:18] Okay. So yeah, I mean the the prices would [48:25] even if they impacted us midyear, the the the actual expenditure on those could potentially go down and it would [48:32] get evaluated at that time. Yeah. Um a couple of things. We pay our claims [48:38] as they come in. So as you know, as healthc care um doctors um uh providers [48:44] are submitting claims, right? it takes a couple of months for those claims then to come out in and for us to to process [48:50] and pay those out. So, I'll just um kind of address the first question, the more the hypothetical one. If we see at the [48:57] federal level that there is a a reduction of um prices for these uh [49:03] specialty medications, uh we would um take that into consideration with the [49:08] next next plan year again as we're looking back in order to project forward. Um and uh and then the the [49:17] second one about plan design changes, right? If we um come to consensus, this [49:23] is something that our insurance advisory committee is is uh really going to be leaning into as we look forward into the [49:30] next year. Um as costs continue to go up, um we are going to have to find ways [49:36] to reduce um reduce the plan benefits in order to again continue to fund the [49:42] plan. So, we're going to have to come up with some creative solutions. Okay. So, GLP1s, I I think we'll be [49:49] coming back to the conversation. Uh just about the GLP1s in particular, a little [49:54] bit more information on that. It seems like we have more research that's coming out almost on a daily basis about not [50:01] only uh GLP1s for weight loss being a cost driver because of the increased use [50:08] and the long-term uh need to stay on uh the the um uh medication for that [50:15] continued benefit. Uh so we know that that increases an ongoing cost, but [50:20] we're also starting to see more research come in about uh some ancillary benefits [50:27] of being on the GLP1s where it um is has the potential of reducing some other [50:33] long-term costs such as muscoskeleletal or um uh other large uh issues with uh [50:40] heart disease and other factors that also we know drive some high cost claims as well. So there's a little bit of a a [50:47] mixed review right now on where the um trend line is is headed in the future. [50:54] Right. Okay. Thank you. Superintendent McIntyre. Yeah, I got a that's an interesting question, director Audet. So [51:00] just maybe just play off that. Um my wondering is a bit procedural, but let's [51:06] say we see that significant drop happen. I mean, I think it requires an act of Congress and so forth or those things, [51:12] but they all let's say that plays out and if we wanted to reset rates, would [51:18] we also have to then maybe people would want to change plans? We got to do a second open enrollment like or would we [51:25] just need consensus amongst the committee? So, we've never done a mid mid mid plan adjustment, but we've never [51:31] also seen a an increase like this. So if if there was a dramatic shift, maybe we [51:36] do rethink that. But I don't know what set of things that sets in motion. Like if it dramatically shifts, I might want [51:42] a different plan because now I I can change my mind on what I want to spend my my my money on. So that becomes a bit [51:50] of a logistics question in my mind like can we manage capacity wise those kind of changes to people coming on and off [51:57] plans through our process. So maybe I answered my own question, but um it's an [52:04] interesting one. I think one we should definitely think about if there's a big swing the other way. At least allows us [52:10] to reset the next cycle if we can't mitigate it mid midstream, right? [52:18] And I'll admit I'm not prepared for that question. I would want to run it by AON. I it's worth as far as whether we can do [52:26] a midyear change like that, I'm I'm not sure. Director Lingfeld, thank you and um [52:32] thank you for your presentation. As we think forward, and I appreciate uh Director Adet's statements about [52:39] potential future things we don't know, one of the things that I think is really important because one of our board [52:46] priorities is recruitment and retention that we have representation of board [52:53] members on that insurance advisory to monitor closely what's happening as well. So, I reached out to Dr. Cherry [53:00] and to the superintendent to make that request. I really think it's vitally important to have one or two board [53:07] members. That's been my experience and I think it's just very helpful to keep us surprised. [53:15] Thank you. Uh coach, um what are the advantages of having or [53:20] of being selfinsured like the district is versus otherwise? [53:26] Yeah. Uh there is well first there's some tax advantage. There's certain taxes that you don't have to pay because [53:33] you're self-insured. Uh but but the big benefit is comes actually when you have [53:38] a good year. Uh so if we were fully insured, we'd be we'd be uh you know [53:43] paying a a insurance company and they would be setting reserve and they'd be building that uh reserve uh cost into [53:52] their rates. Um, and there's a chance when you have a bad year like this, I [53:58] mean, ultimately, if we had had a bad year like this and we were fully insured, the insurance company would be [54:03] coming to us with 22% rate increases. But there's years we actually have, you know, when we have good years and and [54:09] come in below and then we get to keep that it and it builds up in our reserve and it allows us to um ease increases in [54:18] the future, which is kind of what we've done with dental. Um, [54:23] yeah. [54:29] Superintendent McInty. Yeah, I just thought it might be worth sharing. We we we did a bit of a poll with our AMSD [54:34] districts. I was just curious like what what's the experience around the metro right now and and uh that does for us [54:40] include um Rochester, St. Cloud, Duth, and Mano. Um, and of the 22 districts [54:47] that did respond, um, over half are seeing double digit increases and a third are seeing more [54:54] than 15% and we're one of three that are seeing an over 20. And I talked to two others that were at 18 last year, but [55:01] then came down to five this year. So, it's a little I mean, I think you kind of laid it out. It's your your history [55:08] tells you you're leaning on that history and it's hard to project forward. I was thinking as I listened to you present, [55:15] you were the committee was still making decisions April 23rd, 5 days ahead of our scheduled meeting that got cancelceled because of the weather. So [55:21] we were trying to get every last bit of data to help make some um decisions amongst that group because [55:27] all the employee groups are are part of that. Um um so no board members that was being evaluated right up to the two days [55:34] ahead of the packet being published had we had that meeting um as scheduled. So, [55:39] just some information that might be helpful to you. [55:45] Director Simon. Thanks, Casey. Um, going back on the self uh Director Arco's um [55:52] question on the self-insured. So, if you are not self-insured and you run out of [55:59] your reserve, what does an insurance company do? They take that on themselves. [56:07] Yeah. So if you're fully insured, not self-insured, you don't have the reser. We wouldn't have their reserves. We [56:13] would just be paying I'm talking if the insurance company runs out of their reserves. Yep. Because they're they're [56:18] building reserves, too, obviously. Right. Yep. They would increase our rates, right? They would just continue [56:24] for the next cycle. Yeah. For the next cycle. They they wouldn't run out of reserves because they have a much bigger [56:31] pool of reserves than we do. I Yeah. Yeah. I just I this is the first year [56:38] that I'm just curious if self-insured is the right thing to do, you know, like [56:44] going forward. So, I don't know just just um because you think about the risk. If you're self-insured and your [56:51] reserve runs out, you take it from the general fund, borrow it, you said, but that's taking [56:57] money from the general fund. So, I don't know. I just wonder if um when is the next review? Is it next year review? [57:04] because we're in the second year of a two-year contract. Is that true? Correct. I'm just wondering if it it's [57:09] good for this board to and for you folks to do a deep dive into what that means. [57:16] And it just might be even more easily understandable for our staff if we don't [57:22] have to talk about things like we have to add 4% in there to build our reserves up more, you know. So, I don't know. [57:28] It's just a thought. this is the first year that it really has negatively [57:34] impacted the district, our our pool of folks and the use of healthcare. So maybe it'd be it's a good time to look [57:41] at that really in depth. Thanks, Superintendent McIntyre. I I'm glad you [57:46] asked that because I was um curious about this too and I wondered about does that is the is the downside it takes [57:52] away our ability to negotiate that in the compensation package. If we're fully insured, they're going to set the rates. [57:57] We have no say in that if I'm understanding that correct. So as we walk into negotiations that's [58:04] predetermined in essence for us. So the negotiation item is just the district [58:09] contribution towards the rates. Right? So whether we're self-insured or fully insured. So we'd still negotiate that. [58:16] We would still be negotiating that. Thanks for clarifying. But we would then be negotiating also with an insurance [58:21] company uh about those rates. Right. Think about think about your homeowner's [58:26] insurance, right? You you have a big hail storm and everybody gets a new roof, right? Uh guess what? [58:34] Even if you didn't get a new roof that year, it likely might be that you have an increase in your homeowner's [58:40] insurance because that's been the experience of that insurance company where they've had to play all those high [58:46] claims. Yeah. Uh Director Simon, do you mean I'm [58:52] really um stressing you? I didn't let you know these things. It just came to my mind, but um do fully insured folks [58:59] negotiate every year or do they negotiate like us self-insured on a two-year contract or or multipleear [59:05] contract? It's on a two-year contract. So, it's the the same statute, the Health Insurance Transparency Act [59:11] governs both. And so you uh you would uh [59:17] enter into a two-year contract that normally would have a cap for the amount of increase the second year. Uh but not [59:24] necessarily. Uh okay. And then we do every time we do go out, we have gone for a PE bid. I [59:31] know which is really like being fully insured. It's it's a statewide plan that you know you would purchase in you know [59:37] buy into. Uh we haven't gone for traditional fully insured bids before. [59:42] Oh, we could. We could. That's illegal. Okay. So, is Todd um when you talked [59:48] about the two-year contract and there's caps, did we have that in our current two-year contract, did we have a cap to [59:55] increase? We Well, we did on our stop loss. Um so, our stop loss couldn't go [1:00:01] up by more than 14% regardless of our experience. Um, and our experience last [1:00:08] year likely would have led to it going up by more than that 14%. And we had a cap on the administrative fees were [1:00:15] charging um were being charged. It's just the the claims we don't necessarily have a cap [1:00:21] on. So would that would that be the same type of a contract you would have as [1:00:27] fully insured or would it be a cap on claim on whatever we call these monthly premiums too? If you're fully insured, [1:00:34] they would just charge us a premium and we would send the premium to them. But [1:00:39] I'm talking about the increase in the second year of a contract. Would a would a fully insured have a cap on the [1:00:45] premium increase, too? Uh, that would all be negotiable, but they they could have a cap on. So, we could have [1:00:51] negotiated it in our fully insured one, too. We we didn't at that time. Okay. Thanks, [1:00:58] Superintendent M. Just one more piece of information for the board. Just so you're aware, there's a there's a Senate [1:01:04] file right now uh looking at um a statewide pool. It's a different way to look at this for all state workers, not [1:01:10] just schools, with the theory of could that provide increased stability and [1:01:16] maybe better predictability statewide. There are some states that do this. Um but it does take away local control in [1:01:23] that scenario. But a larger pool could spread kind of spread that risk and maybe maybe um save some money just you [1:01:31] don't having as many brokers and third party administrators involved. So that there is a a Senate file this year. There's my sense there's it's not going [1:01:37] anywhere this year and maybe in the future, who knows? But it's out there. It's being discussed as another option [1:01:44] um for state employees. [1:01:50] Director Langenfeld. Thank you. as we think forward also uh [1:01:58] the role of AON in these discussions I think will be vitally important and I [1:02:03] would assume that they will be monitoring can we expect them I'm assuming to monitor very closely what's [1:02:10] happening out in the market what political changes have come forward so that they would be on top of it and [1:02:16] really bringing forward uh the design plan changes and things that could really support our our staff. I I think [1:02:24] none of us would want to see what we're currently in in this reality right now [1:02:29] and um looking forward to to really hopefully uh get to a better place for [1:02:35] our employees as well. So thank you for that [1:02:42] members any further discussion. All right. Uh if not, [1:02:48] members before us is the health insurance premiums rate proposal as presented in appendix A. Is there a [1:02:54] motion to approve the health insurance proposal as presented? [1:03:00] Do we? Oh, or sorry, you said option A or B? Uh the recommendation option. I [1:03:07] got you. Okay. As presented. Sorry. Thank Thank you, Director Adet. Uh with [1:03:14] a motion from Director Audet, do we have a second? Second. Uh thank you, Director [1:03:19] Langenfeld. Is there any further discussion? Uh Director Simon. Thanks, Casey. As um as my wife is a teacher and [1:03:27] our family participates in this insurance program, I will be abstaining from the vote. [1:03:34] Uh Director Aro or Coach Arco, apologies. All right, you're fine. Um so I just want to acknowledge this is a [1:03:40] painful correction. Um, but I still do believe that the most wholesome way to [1:03:45] pay for this is just directly not to pull from the fund or the general fund or anything like that. So, um, I also, [1:03:53] at least from the sound of it, seems like there's merit to being self-insured. So, while it's true that [1:03:59] we're having a bad experience right now, and I would be interested in seeing what the other option would look like, I don't want to have a possible knee-jerk [1:04:06] reaction of saying, "Well, it's just bad because this is happening." It is unfortunate we're in this situation, but [1:04:11] you know, I don't want to demonize the system if it's been working well for us in the past. So, just throwing that out [1:04:18] there. Thank you. Any further discussion? All right. Hearing none, [1:04:24] would all those in favor say I. I. Any opposed say nay. With five in favor and [1:04:31] one abstension, uh, the motion passes. Thank you so much for the presentation. [1:04:36] Thank you. Thank you, board. All right, board. Our last agenda item is to adjurnn. Do we have a motion to [1:04:43] adjurnn? Thank you, Director Simon. Do we have a second? Thank you, Director Langenfeld. Um, all [1:04:50] those in favor say I. I. I. Any oppose say nay. Six in favor and zero opposed. [1:04:55] We are adjourned at 7:20 p.m. Thank you. [Music] [1:05:02] [Applause] [Music]