Like Wrightstown Community School District Superintendent Carla Buboltz, many civic leaders — as well as business owners and executives — are seeing their job descriptions evolve. Healthcare reform, along with escalating health insurance costs, are demanding more of their attention than ever before. A survey by the U.S. Chamber of Commerce says the effects of the Affordable Care Act (ACA) are now the top concern for organizations, edging out general uncertainty about the U.S. economy.
While school district superintendents and other civic leaders don’t have to deal with many of the problems that keep business owners up at night, some find they often must run their organizations like a business.
“For the first time we’ve had to sit down with our staff and talk about managing health insurance costs and work hours and related issues,” Buboltz says. “Those were some of the toughest meetings I’ve ever had.”
Today, superintendents must become knowledgeable — if not experts — about issues like healthcare and insurance.
“Like Carla, they also must become resourceful,” says LuAnn Boyea, who is Wrightstown School District’s benefits consultant. “Civic leaders need to be good at finding and using the right business resources that are available. Because healthcare reform is new and ever-evolving, it can be a skill in itself just to find the right expertise in this area. There’s a lot of misinformation out there. And there’s no one-size-fits-all strategic plan.”
To form the basis of its strategic plan, Boyea provided Wrightstown School District with a Healthcare Reform Impact Study. “This helped to identify what the district must do to comply with the ACA’s requirements and the cost impacts of compliance,” says Boyea. “Then we needed to come up with a strategic plan that brings costs down to a manageable level while still providing a competitive employee benefits package.”
For Wrightstown, the ACA’s “play or pay” provision that takes effect in 2015 has significant cost impacts. The provision requires organizations that employ at least 50 full-time workers to offer affordable health insurance to employees. A key detail of the provision is that full-time workers are defined as those working a minimum of 30 hours per week. Employers that do not offer coverage will face a $2,000 penalty per employee per year.
“We currently have staff members who work over the 30 hours and are not offered insurance,” says Buboltz. “And they’re okay with that. That’s the position they took. Now with the ACA, by law, we will need to offer them insurance. The cost impact of that is $350,000 per year, a huge increase. And that’s not going to happen. We don’t have those kinds of dollars. If I incur $350,000 more in health plan costs, that’s less dollars I have for teachers in classrooms and student achievement — our top priorities. And the penalty for not complying — for not offering insurance to these newly qualified employees — is only a little less, something like $225,000 per year.”
Several other strategic planning items were included in the Healthcare Reform Impact Study as well, like the “affordability” issue and the so-called Cadillac tax. “Even though some mandates such as the Cadillac tax won’t take effect until 2018, we need to complete our comprehensive strategic plan now,” Buboltz says. “If our short-term steps don’t line up with our long-term plans, we won’t be able to make our strategic changes in 2018.”
Buboltz discussed these issues with her staff and worked out a plan. These discussions, according to Buboltz, were some very challenging conversations.
“We’ve had to reduce nearly all of our paraprofessional roles down to below 30 hours,” Buboltz says. “That’s where communication and education comes in to explain why, to lay out the different options and to show what we need to do.”
Employers should use all available forms of communication — in person, electronic, paper and audio/video — to effectively get the message across. Buboltz believes difficult messages should always come from top leadership.
“I’ve taken a very active role in these discussions because the message needs to come from me,” she says.
Buboltz says she values her district’s open and supportive culture now more than ever; a positive culture is just as important as a strategic plan for persevering through difficult times. She is determined to maintain these positive values by demonstrating them herself. “We need to face these challenges and changes by working together to benefit the staff, students, families, and taxpayers of the Wrightstown Community School District.”
“Most of the meetings and communications with staff involve myself partnered with an Associated Benefits and Risk Consulting representative, who sometimes speaks before me and sometimes after,” she says. “We’ve done many person-to-person meetings, some small groups and some large groups. And we often follow up with written communications.”
Buboltz says healthcare consumerism is the key to everything. There’s no strategic plan that will work unless employees are “consumers” rather than “recipients” of their healthcare. The district’s strategy and health plan design depends on employees being engaged in their healthcare.
Currently, Wrightstown School District offers employees five different health plan options. “They are based on the providers that our staff is looking for,” says Buboltz. Not surprisingly, two of them are consumer-driven options — one uses a health reimbursement account (HRA) and another, a health savings account (HSA). Eventually, the traditional options may be dropped due to the cost of continuing those options, but Buboltz says it’s best to introduce change gradually when possible.
How is healthcare consumerism essential? “Our district and our school board came up with a sort of innovative approach that encourages consumerism,” Buboltz says. “We negotiated a cap on spending for each employee enrolled in our health plan.
If an employee chooses a health plan that exceeds the cap, the employee will have to pay the difference out-of-pocket. Therefore, all employees have an incentive to choose an economical health plan and make wise healthcare choices. It creates a sense of urgency when they know their pocketbook will be impacted,” Buboltz says.
Leading by example, Buboltz has become a meticulous healthcare consumer herself. “I’ll give you a personal example,” she says. “I chose the lowest-cost plan with the narrowest network because almost all of our doctors were in that plan. Except for my son — he sees a doctor who is not in that network. Moving to a plan that covered him would have cost me about eight percent more. And I thought, ‘You know what? I can use my health reimbursement account to help pay expenses for that one doctor. I will still be paying much less for healthcare even if I pay out-of-pocket for that doctor compared to what it would cost moving to a plan that covered him.’ I became a consumer of my healthcare instead of just a recipient of it.”
With the right communication and support, Buboltz is optimistic about her district leading the way through healthcare reform as healthcare consumers.
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When the public exchanges opened in October 2013, the technical glitches and low enrollment were well publicized. Since then, both public and private exchanges have evolved significantly. The private alternatives that have entered the scene often have more advantages than their public counterparts.
Public health insurance exchanges have a head start over private exchanges, but in the coming years, employer and employee awareness will increase, and soon the private options should receive the recognition and utilization they deserve.
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