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Creation of TUSD’s self-insured health plan

A district as large as TUSD should benefit from many economies of scale. TUSD achieved this in one area by switching to self-insurance in health, which Mark advocated and which is entering its third year. This change is saving millions of dollars while generating fewer complaints than the former plan.

Mark is the Board’s representative on the health plan’s Trust Board, which recommended a rate increase of only 2% last year, and no increase at all this year, due to improved cost control. Some of those savings have come from rebids of two provider contracts: Mark advocated renegotiating TUSD’s reinsurance contract, which reduced TUSD’s annual premium by about $550,000, and rebidding the pharmacy benefits contract, which will save an estimated $600,000 annually.

Moving Forward

More of TUSD’s health provider contracts should be rebid or renegotiated. Up to this point, the Trust Board has recommended few changes in plan benefits (since the switch to self-insurance), but some parts of the benefit packages should be redesigned, to encourage employees to make healthier and more cost-effective choices. The responsibility of the Trust Board, which is ultimately owned by TUSD, is to operate the plan on a break-even basis, so that efficiency gains pass through to employees in lower rates.