Consultants from GBS Benefits told the Washington County School District insurance committee on April 12 that the district can lower long-term benefits costs by moving from its current fully insured arrangement to a self-funded plan and by steering employees toward lower‑cost providers and plan designs.

Scott Stewart, senior consultant with GBS Benefits, said the firm is recommending a phased, five‑year approach with an initial conversion effective Aug. 1. "To do that, that's gonna take a fair amount of education and it's gonna take a fair amount of implementation meetings," Stewart said. He described immediate savings the district could capture by eliminating the fully insured risk charge and receiving pharmacy rebates directly, and by lowering administrative fees under a self‑funded arrangement.

The consultants laid out a funding continuum that ranges from fully insured (current state) through level‑funded and self‑funded with bundled administration, to carve‑outs for stop‑loss reinsurance and pharmacy benefit management, and more aggressive approaches such as reference‑based pricing. "As we move from left to right, you're gonna take on a little more risk and we're gonna have a little more reward potentially," Stewart said.

GBS provided two underwriting scenarios the committee reviewed: one that applied an expected funding level of about 14.5 percent and a second, more conservative scenario near 18 percent excluding pharmacy rebates. The firm used roughly six months of vetted claims data along with older records from prior carriers to model those scenarios; consultants recommended the district stabilize on one carrier for two years to produce the mature data stop‑loss underwriters require.

Consultants and committee members also discussed programmatic changes to reduce utilization and cost, including setting enhanced plan incentives to steer elective procedures to lower‑cost surgical centers (GBS cited an approximate 40–50 percent price gap between some free‑standing surgical centers and hospital bills), contracting with freestanding imaging centers, and developing on‑site or contracted cash‑price clinics for low‑acuity care. "If we can get people using the surgical centers, and if we can get the [freestanding] radiology on board, that's a huge savings," Stewart said.

On pharmacy, GBS proposed negotiating to return an estimated 90 percent of pharmacy rebates to the district under a self‑funded model. Consultants used a conservative rebate estimate of $500,000 in the underwriting examples; they cautioned the actual rebate amount can vary and recommended treating rebate realizations conservatively in the first year’s budget.

The consultants emphasized implementation risks and the limits of available data. Rob Ferguson of GBS said stop‑loss carriers and other bidders will demand consistent, mature data, and that reinsurance pricing often cannot be locked until about 60 days before a new effective date. "They won't lock in that reinsurance until 60 days prior to the effective date," Ferguson said, underscoring the need for timely, consolidated claims data.

Committee members asked about the district’s tolerance for premium changes and options that would discourage dependents from disproportionately increasing utilization. Consultants presented a five‑tier option and a 3‑tier option to allow a spousal surcharge (a higher contribution for employees who cover a spouse) or different employer contribution percentages by tier. Lyle (district staff member) and board members indicated willingness to consider scenarios but not to adopt a surcharge without seeing numbers: "I may not be in favor of it in the end, but I gotta see what the numbers say," one board member said.

The group discussed risk‑management mechanics for a first year of self‑funding — including purchasing 12 months of reinsurance in year one and then a 15‑month coverage (12 months plus a three‑month run‑out) for the following year — and the need to build reserves over time. GBS estimated a long‑term reserve target roughly equivalent to two months of claims, and suggested a planning figure on the order of $4.5 million for that reserve based on the district’s size.

No formal vote was taken. The insurance committee asked GBS to produce a set of scenarios and model runs for the board and committee to review before a joint meeting scheduled for April 20; consultants agreed to circulate materials in advance. The committee also expressed a near‑consensus that the district should remain with its current claims administrator/carrier for an interim period long enough to accumulate two years of consistent data, then re‑bid carved‑out services if warranted.

The discussion included repeated cautions about member disruption. Several speakers and committee members said the district’s prior carrier changes had caused billing confusion and member dissatisfaction, and urged the district to weigh disruption against savings. "If you don't, like, have a picture of what that's gonna look like, it's gonna look like this building burning down," a committee member said when describing the potential employee reaction to frequent carrier changes.

Next steps agreed by the committee: GBS will produce 3–6 named scenarios (including a baseline self‑funded option with minimal plan design changes, a scenario including a spouse surcharge/5‑tier structure, and versions that include or exclude conservative pharmacy rebate assumptions) and will distribute the spreadsheets and explanatory materials to board and insurance‑committee members before the April 20 joint meeting. The committee asked the consultants to show budget impacts, employer/employee premium splits, projected reserve build, and sensitivity to high‑cost claims in each scenario.

The meeting closed with committee members and the association representatives emphasizing the need to balance benefits quality for employees with the district’s long‑term financial sustainability. "We are here to represent employees, and employees are our first priority always," one association representative said. The board and committee asked GBS to return with the requested materials and model runs so trustees could make an informed decision at the scheduled follow‑up.