School Board bites the bullet on insurance

CENTERVILLE — Like many Louisiana people, the St. Mary Parish School Board is wrestling with spiraling insurance costs. On Thursday, the board took its medicine, in the form of a steep premium hike for covering its employees and retirees, for at least one more year.
After that, the board’s insurance man is recommending that board members consider self-insured coverage.
The board voted Thursday to renew its employee and retiree coverage with Blue Cross/Blue Shield of Louisiana for another year. The renewal means a 14.6% premium increase over the $13.3 million in annual premiums the board will pay in 2023.
The premiums currently go to cover 1,409 enrollees, about evenly split between current employees and retirees. The board decided at its September meeting to absorb this year’s increase, so the premium hike won’t be passed along to employees.
Big-dollar claims have become a concern. James Perez, the School Board’s insurance consultant, said the plan has been hit with 69 claims of at least $25,000 this year, 64 of which remain active.
His presentation to the board said three ongoing claims have been for $303,000, $368,000 and $1.6 million. Claims classified as large have totaled $2.3 million.
Prescription drug claims are also driving cost increases, Perez said. Drug costs are up nearly $879,000 year over year in 2023.
Employee or retiree claims for four popular Type 2 diabetes medications — Ozempic, Mounjaro, Jardiance and Trulicity — have increased in number from 584 to 867 and in cost from $486,000 to $814,000 in the last year.
For the first 10 months of 2023, claims have exceeded premiums by about 1%. Last year, the loss-to-premium ratio was 88%.
Perez recommends moving to a self-insured system, in which the board would set aside funds to pay claims with professional administration. St. Mary is the largest of only nine Louisiana school systems that continues to be fully insured, he said.
The big advantage would be that medication incentives and rebates would go to the board’s insurance fund and not to the insurance company. By Perez’ figures, that would amount to about $75,000 per each of the first 10 months in 2023, enough to mean that income in the fund would have exceeded claims over that period.
Perez said he’s concerned about the baseline established by the large claims in 2023, but he’s recommending consideration of a self-funded system in 2025.
“I am of the belief that at the right moment, properly administered, self-insurance is the way to go for the board,” Perez said.
The board’s vote was to renew the current coverage but didn’t include any provision concerning self-insurance.
Also Thursday:
—Superintendent Dr. Buffy Fegenbush reported that as of October, public school enrollment in St. Mary was at 7,238, down 210 from last year.
The decline continues a trend evident for more than a decade, and will affect the amount of money the system will receive under state Minimum Foundation Program.
—The board was introduced to teachers and students in “pre-educator” courses at Morgan City and West St. Mary high schools.
—The board was introduced to Franklin Senior High student Ashley Velez, the state Jobs for American Graduates president elect. She was introduced by Franklin Senior High Principal Natasha Jackson and JAG teacher Ponchella Doucet.
The Louisiana Department of Education describes JAG as a “dropout prevention and recovery program” in “an educational setting that promotes academic and skills attainment, civic responsibility, leadership development and social awareness that is necessary to become a responsible citizen and productive worker.”
—The November Students of the Month are eighth-grader Whitley Berry of Morgan City Junior High and senior Cherish Lewis of Berwick High. The Employees of the Month are English language arts teacher Emily Berry, Whitley’s mother, of MCJHS and biology teacher Zachary Stewart of Berwick High.