January 2018

Texas districts increasing contribution amounts amid rising premiums

by Troy Bryant

Most responding Texas school districts (95 percent) saw their health insurance costs rise in 2017‒2018, according to the newest health insurance premiums survey conducted by TASB HR Services. Of the districts that saw increases, 90 percent passed all or some of the additional costs on to employees.

TRS-ActiveCare PPO plan rates increased across the board for 2017‒2018. The most common plan in Texas schools, TRS-ActiveCare 1-HD (high deductible), had a 7 percent average increase among all coverage types (e.g., individual, individual plus spouse, family). TRS-ActiveCare Select saw a double-digit average increase of 10 percent across coverage tiers, while TRS-ActiveCare 2 premiums—already the highest cost plan—jumped nearly 12 percent on average. TRS-ActiveCare HMO rate changes varied; for example, FirstCare premiums increased 9 percent on average, while Blue Essentials (formerly Allegian) rose 2.5 percent.

More than 90 percent of responding districts participate in a TRS-ActiveCare PPO or HMO plan. Other districts are self-insured, fully insured, or partially self-insured.

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Compared to 2016, district monthly contribution amounts rose $25—from $275 to $300—for employee-only (individual) plans; employee-plus-family median contributions rose $12, from $288 to $300. These contribution amounts include $75 provided by the state. For the survey, participants reported amounts for their employee-only and employee-plus-family plans with the highest number of employees enrolled in the district.

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According to the survey, the median employee-only total monthly premium is $351 ($4,212 annually); for the employee-plus-family tier, the total monthly premium is $1,316 ($15,792 annually). Both rates are equivalent to the TRS-ActiveCare high-deductible plan.

The median employee’s portion of the total monthly cost reported in the survey is $101 for the employee-only plan and $1,054 for employees with family coverage. Employees of Texas districts pay 80 percent of the total premium for family health care costs. Approximately 15 percent of surveyed districts reported paying 100 percent of the employee-only insurance premium this year.

National surveys indicate a stabilization of health insurance costs across the U.S. According to a 2017 survey released by Kaiser Family Foundation/Health Research & Educational Trust (HRET), the average monthly premium for individuals is $558 ($6,690 annually) and the average family premium is $1,564 ($18,764 annually)—an increase of 4 percent and 3 percent respectively from 2016. The national survey noted that average family premiums have increased 19 percent since 2012.

Mercer’s 2017 National Survey of Employer-Sponsored Health Plans found average health benefit coverage rose 2.6 percent per employee, similar to last year’s 2.4 percent increase. Total health benefits cost averaged $12,229 per employee in 2017, according to the survey.

Employees pay 24 percent of the total cost of coverage through payroll deductions. Companies are countering growing health care costs through high-deductible health plans and health savings accounts (HSAs), as well as promoting lower-cost telemedicine services and directing employees to specialty pharmacies in order to reduce prescription drug costs.

According to the 2017 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 $26,944. This is a rate increase of 4.3 percent compared to last year. Of the total, $11,685 (43 percent) is paid by the employee. This includes $7,151 in payroll deductions for premiums and $4,534 in out-of-pocket costs incurred at the time of care.

Finally, participants in the TASB survey 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 348 Texas public school districts in November 2017. HR Services member districts can participate in the ongoing 2017‒2018 health insurance premiums survey in DataCentral. Users can access the full results upon completion of the survey.