For the first time since 2015, the Mehlville School District has increased its health insurance rates for district employees. 

At the Board of Education meeting Sept. 16, the board unanimously voted for deductible and rate changes for the 2022 calendar year, the first time health insurance rates for the district have increased in six years. 

The district’s health insurance plan is self-funded and receives contributions from the district, employees and retirees. There are over 1,100 employees and over 75 retirees that participate in the plan. 

The health insurance plan is on a calendar year, differing from the district’s fiscal year, which follows the school year. 

The medical fund balance must have $2.5 million every Dec. 31, based on the idea that if the district’s health plan ceased to exist that day, there would still be $2.5 million in claims to payout. To add cushion, $4 million is the minimum fund balance recommended by Mehlville’s chief financial officer and Insurance Committee. 

“Most recently in 2020 was our first year of fund balance decline. We project this year … a possibly $1.4 million decline based on an 8-percent growth in claims,” Chief Financial Officer Marshall Crutcher said at the Sept. 16 Board of Education meeting. 

Without any rate changes, the fund balance begins to decline yearly at an “exponential speed,” said Crutcher. 

Under the recommendations adopted by the board, deductibles and copays would be restored to 2018 levels, which would save an estimated $540,000. 

Revenue would increase by $1.2 million by increasing rates 12 percent – however the rate increases only impact staff with coverage for their spouse, as well as all retirees. 

In total, only 15 percent of all staff and retirees will be impacted by the increase and only 8 percent of all staff. Staff with individual or child coverage won’t be impacted. 

The Insurance Committee previously discussed the rate increases and unanimously recommended its adoption. 

“When we went through everything in the meeting … we had reitrees there …. we had some older staff members who are going to be retired in a few years as well. … It really was unanimous,” board member Patrick McKelvey said. McKelvey is on the Insurance Committee. 

“I think it does make sense … I feel bad for the 8 percent who do have a spouse on it but if it’s only 8 percent, why would we subsidize that 8 percent on the backs of 92 percent of our employees,” added Vice President Peggy Hassler.  

Crutcher said the rate increase proposal was designed to grow revenue while minimizing impact on total district staff. With the increases, the 2022 fund balance is forecasted at $7.6 million, a shortfall of $534,000 from the target balance but “better than without the rate increase.” 

The fund balance projections are based on the 8 percent increase in claims and a 12.5 percent stop loss increase, although these are just estimates. Crutcher said that currently the district is on track to have an 11 percent increase in claims by the end of the year. 

“All of these presentation’s numbers are based on this current year’s claims increasing 8 percent. … You can have huge swings month to month. We can end up for the calendar year well below 8 percent or well above 8 percent,” said Crutcher. “Once we get to the end of the calendar year, we’ll know whether we’re ahead of pace or behind of pace.”

With healthcare costs increasing, the district could be looking at minor changes to its insurance every year or every other year going forward. 

“We’re in a good position right now from a fund balance but we won’t be in a good position if we don’t do anything. … So that’s the whole thing. We want to catch this on the front end and manage this,” Crutcher said.