Sarasota Schools get hefty health insurance refund compliments of the Affordable Care Act
Sarasota County Schools are getting $800,000 back from their health insurance provider because of the new federal healthcare law. The rebate from Blue Cross and Blue Shield could have an impact on the district’s overall budget by mitigating potential tax increases. Al Weidner, deputy chief financial officer for Sarasota schools, said there’s no way to know for sure, but he’s hopeful the Affordable Care Act will continue to drive healthcare costs down for employees and the district.
“I personally look at it as a good thing that hopefully it will lower the overall cost of care by doing these screening for diabetes and all these other things early that was not covered previously.”
Under provisions of the Affordable Care Act, insurance providers have to spend at least 85% of customers’ premiums on actual health-related coverage. In the case of Sarasota schools, they didn’t and have to give back the difference. Weidner said even though the rebate is pocket change compared to the overall budget, it still makes a big difference.
“So, in this budget that actually gets final approval in September, on September 11th, we are looking at using approximately $14 million of our reserve. What this will mean is, that means we’ll definitely not use that much of the reserve.”
Sarasota County Schools pay almost $30 million a year for healthcare benefits. That buys full-time staff members 100% individual coverage. To cover an entire family, employees spend as much as $1,000 a month. Weidner hopes this rebate will cover some of those premiums.
“Now, what we’re going to be doing with that $805,000, because it does have to go towards the cost of healthcare, we’re going to apply that to the amount the employees and the school board pays and reduce that premium next year by the $805,000 rebate we received.”
But it’s not quite that simple. The extra money will be used to lower next year’s insurance premiums, but they are expected to go up by as much as 5%. And Weidner said the help with premiums likely won’t outweigh the increase.
“This amount will be applied against that so it could mean instead of paying a 5% extra, they may pay 4% - somewhere around there – but we’ll have to wait and see what our actual increase in premium will be because we don’t actually get that until October.”
Due to this year’s rebate it is possible that Blue Cross and Blue Shield won’t raise premiums. More provisions of the Affordable Care Act will go into effect in 2014. One of those will require employers to provide health coverage for employees working at least 30 hours a week. Weidner said that law will make a lot of part-time staff members eligible for health benefits.comments powered by Disqus