School is back in full swing, but in many regions across the United States administrators are still grappling with an unprecedented staffing challenge: long hours, low pay, and pandemic stress have pushed a record number of teachers to leave the workforce and qualified replacements are few and far between. It’s difficult to pinpoint the full magnitude of the problem due to a lack of specific data. According to the Bureau of Labor Statistics, we do know that roughly 370,000 teachers have left the profession since the start of the pandemic and fewer people are applying to fill these vacancies, creating severe gaps in some of our nation’s classrooms.
In response to this historic shortage and continued exodus, school officials are trying a variety of strategies to attract and retain qualified educators. Some are using time-tested methods such as updating recruitment materials and cultivating collaboration. Others are opting for more radical approaches including recruiting summer camp counselors and members of the Army National Guard into classrooms and dropping college-degree requirements as prime examples. One less obvious tactic being used by some administrations, including Menasha Joint School District (MJSD) in Winnebago County, Wisconsin, is innovating employee health benefits.
The Opportunity: Exploring How to Improve Employee Healthcare Benefits
MJSD is in the top 60 largest districts in Wisconsin and one of the state’s most progressive educational systems, with 3,200 students across eight schools and a workforce consisting of 491 employees. Even before the COVID-19 outbreak, MJSD took proactive measures to ensure the retention of its existing staff and effective recruitment of new team members. More recently, after speaking with employees, the school revisited its health benefits plan.
MJSD employees expressed concerns surrounding their healthcare coverage, including a limited provider network and confusion over copays, out-of-pocket costs, and deductibles. The school district viewed their concerns as an opportunity to see where improvements could be made — improvements that would have a positive effect on its employees and their families.
The Solution: A Customized Self-Funded Health Benefits Plan
After discussions with NBS Advisors, LLC, a consultant with experience in designing plans that include innovative strategies, MJSD opted to forego traditional insurance and become self-funded. A self-funded health insurance plan is an employer-provided coverage plan that is not purchased from an insurance carrier (i.e., the employer funds the claims themselves). Self-funding gave MJSD the flexibility to build a creative, cost-saving health plan and meet the needs of its employees by simplifying coverage and billing.
Utilizing a vendor-partner network of services, MJDS created a customized plan that included onsite direct primary care access, free care for a subset of healthcare services, pharmacy alternatives for high-cost drugs, and more. All these initiatives are supported through one consolidated customer service line that teachers, staff, and their families can call into for help with finding the best care at the best price.
“When you offer members free and exemplary independent primary care and medications, incentives to use low-cost quality providers, and concierge service, you give members a better health plan that lowers cost for both the plan sponsor and plan participants,” said Sara Hames, Principal at NBS.
The Process and Results: Navigating the Healthcare Benefits Marketplace and Finding the Best Solution
When its benefits renewal season approached, MJSD hired NBS to find a healthcare plan that made the most sense for the school district, weighing factors like coverage, quality, and cost. NBS compared different carriers (i.e., Blue Cross Blue Shield, UnitedHealthcare, etc.) and Third-Party Administrators (TPAs) to see how their services aligned with MJSD’s workforce needs and administrative goals. In general, carriers operate as one-stop shops, with their own networks and process claims, for example, and offer one-size-fits-all solutions. TPAs, on the other hand, usually offer more flexibility as they work with various vendors and can build a customizable solution for each client.
With MJSD, NBS determined that TPA Prairie State Enterprises (PSE) was the best match for the school district. Working with PSE and the TPA’s concierge styled FiveStar Health program, MJSD school administrators were able to build a plan that included access to a broader PPO network and simplified billing through PSE’s partner vendor Health Payment Systems, Inc. (HPS). HPS is contracted with two-thirds of Wisconsin counties, covering 124 hospital facilities and 23,846 individual providers.
“Providing navigation of benefits and clinical care paths is crucial to the success of any program, but especially one that’s self-funded,” said Michou Reichelsdorfer, President of PSE.
MJSD’s innovative, self-funded approach led to the following results for their health plan in 2021:
$1.7 million surplus for year one;
37 percent savings on RX costs ($500 thousand);
69 percent loss ratio;
$1 million less spent vs prior year premium paid;
$2 million less spent vs prior year claims cost; and
Members spent 10 percent less in out-of-pocket costs than the prior year.
“We’re realizing dramatic cost savings with zero percent increases being self-funded,” says Chris VanderHeyden, Superintendent of Schools at MJSD. “By avoiding the need for a traditional insurance company and partnering directly with these different service providers, we believe we can continue to increase the overall quality of care and improve the employee experience while reducing the burden of healthcare costs.”
Lessons Learned: Innovating Health Benefits Maximizes the Employee Experience
Salary isn’t the only factor candidates consider when evaluating a job offer or staying with an employer. Job seekers weigh a variety of options in relation to their salary, and most place a high value on health benefits. According to a recent survey, healthcare plans are an important reason to join an organization for 48 percent of employees, and an important reason to stay for 60 percent of people, this is up from 29 percent and 43 percent in 2015.
Focusing on what employees value most in a healthcare plan can help school administrators attract and keep top talent. Case in point: MJSD. Beyond lowering employee out-of-pocket medical-related costs and expanding their provider network for improved care and services, MJSD’s revamped healthcare benefits plan is now considered a crucial recruitment and retention tool.
The author, Brian Marsella, is President of HPS/PayMedix. He has been in the healthcare industry for 30 years and gained significant experience across many disciplines including underwriting, client management, sales, marketing, product, consulting, network management, board leadership, and community engagement.