Strong stance brings better insurance rate

FALLS VILLAGE — The Region One School District is changing its health insurance carrier, according to Business Manager Sam Herrick — resulting in cost savings not only for the schools in the six-town district but also for town governments.

After months of meetings and negotiations, Region One is signing on with Aetna, after at least 20 years with Anthem.

Herrick said the savings have not yet been calculated to the last nickel, but the savings to the district should be between $400,000 and $450,000. The Region One health insurance account is a $7.5-million piece of business.

The Region One health insurance plan covers some 1,100 people — not just teachers and their families, but town employees in the six towns that comprise the school district. The towns are Sharon, Salisbury, North Canaan, Cornwall, Kent and Falls Village (the town of Canaan).

When the 2010-11 budget planning season began, the Region One Board of Education and Region One officials were dismayed when the current insurance carrier, Anthem, gave an initial renewal offer that called for a 14.91-percent increase — including a 35.2-percent increase in the high deductible plan that had been promoted as a way to hold down costs.

Region One recently hired an insurance broker, Kona-HR,  which embarked on a lengthy course of negotiations with Anthem, eventually getting the renewal offer to 8.32 percent overall (and 15 percent for the high deductible plan).

Keeping its options open, Region One issued a Request for Proposals last fall, and Kona-HR fielded offers from other insurance companies. Aetna, with a tentative offer that included an increase of 1.68 percent, got their attention.

The final deal with Aetna includes an overall increase of 1.62 percent in premiums — for both the traditional preferred provider option (which serves about 80 percent of those covered in Region One) and the High Deductible Health Plan.

Herrick described the process of comparing Aetna’s offer and coverage with Anthem’s. Consultants from the Connecticut Education Association and the American Federation of State, County and Municipal Employees (the two unions representing many individuals in the district) prepared their own lists of questions for Aetna.

Herrick said it was a lengthy and at times cumbersome process. But by the end of it, “all parties were satisfied, when we came away from the table, that we were meeting or exceeding� the coverage provided by Anthem.

Ultimately, the diverse groups that make up the Region One buying group realized, “It’s really important we go forward with this and keep these costs in check,� Herrick said. “Employees did their due diligence. There was not a lot of resistance.�

What if Aetna, having secured the account, decides to raise premiums dramatically for next year’s negotiations?

Herrick said that Region One, having demonstrated a willingness to jettison a longstanding business relationship, now has better leverage. “If and when that happens, we now have more options.�

Region One Board of Education Chairman Judge Manning said he was happy with the outcome. “It was a tremendous amount of work and we’re pleased the unions joined with us to save the district — and the employees — a considerable amount of money.�

Manning noted that the district had been threatening to leave Anthem for years. “A lot of people were betting it couldn’t be done.

“This gives us some credibility.�

Asked what differences or disruptions employees can expect when the coverage switches July 1, Herrick said that the changes would be minimal for most people. And while the co-pay for, say, a particular prescription drug might be higher with Aetna, the employee will also see a reduction in the amount withheld from the paycheck for employee contributions.

The Aetna provider network matches Anthem’s by about 98 percent, he added.

Next up is the transition. Herrick said Region One officials and Aetna would be meeting this week to set up a transition plan,  and get new policy information and insurance cards out to the clients.â€�

“We’ve got a lot of work to do,� he said.

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