January 2017, Vol. 2

Most health insurance premiums rising in Texas districts, cost passed on to employees

by Troy Bryant

Most responding Texas school districts (82 percent) saw their health insurance costs rise in 2016‒17, according to the latest health insurance premiums survey conducted by TASB HR Services. Of the districts that saw increases, some 95 percent passed all or some of the additional costs on to employees.

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Ninety percent of responding districts participate in a TRS-ActiveCare PPO or HMO plan. Other districts are self insured, fully insured, or partially self insured.

TRS-ActiveCare PPO plan rate changes varied for 2016‒17. The most common plan in Texas schools, TRS-ActiveCare 1-HD (high deductible), saw no changes in premiums at any of the coverage tiers. The newest plan, TRS-ActiveCare Select, had an average rate increase of more than 2 percent across coverage tiers, while TRS-ActiveCare 2—the highest cost plan—premium increased an average of 5 percent. TRS-ActiveCare HMO rate changes varied more widely; Scott & White premiums increased 5 percent on average, while FirstCare had double-digit increases at every tier.

District participants were asked to provide monthly premium rates and district contribution amounts for the employee-only and employee-plus-family plans with the highest number of employees enrolled in the district. The median employee-only monthly district contribution amount was unchanged from last year ($275); the employee-plus-family contribution rose $13 (from $275 to $288).
 
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According to the survey, the median employee-only total monthly premium is $341 ($4,092 annually); for the employee-plus-family tier, the total monthly premium is $1,231 ($14,772 annually). Both rates are equivalent to the TRS-ActiveCare 1-HD plan.

The employee’s portion of the total monthly cost reported in the survey is $91 for the employee-only plan and $972 for employees with family coverage. Some 10 percent of surveyed districts reported paying 100 percent of the employee-only insurance premium.
 
According to the 2016 Milliman Medical Index (MMI), the average annual cost of health care for a family of four covered by a PPO plan in the U.S. is $21,510 (not including employee out-of-pocket costs). Of the total, $14,793 (69 percent) is an employer subsidy; $6,717 (31 percent) is the employee’s contribution. In comparison, for family health care costs, Texas districts subsidize 23 percent of the total cost, while the employee’s contribution makes up 77 percent of the total.

National surveys indicated a slowdown in premium increases when looking across the U.S. According to a 2016 survey released by the Kaiser Family Foundation and the Health Research & Educational Trust (HRET), the average monthly premium for employee-only is $536 ($6,435 annually) and the average family premium is $1,512 ($18,142 annually)—a 3 percent average increase from last year. The national survey noted that average family premiums increased more slowly over the past five years (20 percent increase from 2011 and 2016) than the previous five years (31 percent increase from 2006 and 2011).
 
Kaiser/HRET noted this trend can partly be attributed to a rapid rise in deductibles, as more workers switch to high-deductible plans. The average deductible for an individual is $1,478, up $159 or 12 percent from 2015. In comparison, the ActiveCare 2 individual deductible is $1,000 and the ActiveCare Select individual deductible is $1,200. The TRS-ActiveCare 1-HD deductible is $2,500. Deductible amounts for all TRS PPO coverage plans were unchanged from last year.
 
Finally, participants in the TASB survey also were asked if their district implemented other health care cost-saving measures. Flexible Spending Accounts (FSAs), onsite flu shots/immunizations, and telehealth services are additional benefits most commonly provided by districts, according to the survey.
 
Data was collected from 308 Texas public school districts in November 2016. HR Services member districts can still participate in the 2016‒17 health insurance premiums survey by visiting HR Surveys in DataCentral. Users can download customized reports of the full results upon completion of the survey.