Bedford Central School District to save with new health plan

Chart from The Segal Group shows comparison of premium costs for 2025-26 and 2026-27 under the current self-funded health insurance plan and NYSHIP premiums. BCSD GRAPHIC

By JEFF MORRIS

Assistant Superintendent for Business and Operations Jose Formoso gave the Bedford Central Board of Education an update on the district’s efforts to limit extreme increases in health care costs at its Jan. 7 meeting.

Board President Gillian Klein noted the insurance has been an ongoing discussion for several years and a topic for the budget advisory community group and finance committee. She said they had analyses done to determine whether they should remain self-insured.

In September, the board learned that total medical expenses for 2024-25 came in at $3.6 million over what was budgeted — an increase that was deemed unsustainable. At that point, a look back at budgeted health care amounts and actual expenditures over a period of years revealed that the budgeted amounts had consistently missed the mark, and the board recognized the need to take a closer look at audited data.

Members agreed with a proposal by Superintendent Robert Glass to spend $10,000 to have Segal do a data analysis and comparison of different health plan options.

Introduced by Formoso, Vanessa Flynn of health care consultant the Segal Group said they had Segal’s commitment to ensure that the faculty, staff and all the district’s employees “continue to have a sustainable, high quality health benefit.”

Formoso reviewed what had brought them to the current moment. Expenses for the health plan have been higher than projected; regardless of the method that was used to project health insurance expenses, they were still coming in under the actual amount. 

“That causes a number of problems in terms of being able to accurately budget for future years,” said Formoso, “and also in terms of being able to charge the right premium equivalent.”

The premium equivalent is the basis for the percentage of the premium that employees pay.

In 2022-23, health insurance premium equivalents were less than they should have been due to the experience of the plan. On July 1, 2023, premium equivalents were increased by 33%, though the increase should have been 43%.

Formoso said the district committee had worked hard to evaluate the plan and possible changes to mitigate risk; the district made changes to several copays and moved to Anthem, but those actions were not enough. The 2024-25 fiscal year ended in an unsustainable deficit position of over $3,000,000.

It became clear, according to Flynn, that the size of the plan was the issue, and that the district health plan needed to be part of a larger risk pool. The district evaluated three larger plans. One was the Putnam Northern Westchester Health Benefits Consortium, but it turned out the eligibility rules eliminated this option. Another was the State-Wide Schools Cooperative Health Plan, but the district’s application to join was declined.

The third option that was evaluated was the New York State Health Insurance Program. NYSHIP is a comprehensive health insurance program for public employees in New York state, managed by the state Department of Civil Service. NYSHIP covers over 1.2 million state and local government employees, retirees and their families.

It offers comprehensive benefits using Anthem for the hospital network and UnitedHealthcare for the professional network, and coverage is available worldwide.

Flynn pointed to a comparison of the employee premium equivalent rates that are currently in place, the break even premium equivalent rate that would be needed to avoid a deficit under the current plan, and the premiums under NYSHIP. She noted that “premium equivalent” is the term used in a self-funded plan because it is equal to the premium in a fully insured plan.

“When we’re talking about NYSHIP, we’re referring to it as a fully insured plan,” Flynn said. “You will pay a premium every month, it will be a fixed cost; you will remove the volatility that you experienced on a week-to-week or month-to-month basis.”

The comparison showed that NYSHIP rates were significantly below the employee equivalent rates in every instance except for 2025-26 individual coverage. In the projected 2026-27 rates, NYSHIP is at $19,337 for individual coverage and $43,965 for family coverage, while under the current plan, individual would be $20,736, and family would be $53,916. Those are all annual numbers.

Flynn showed that the employee contributions to a percentage of premium costs will offer cost savings. She also showed that, when compared side-by-side, coverage is the same, and the out-of-pocket limit is less under NYSHIP, which will also save employees money.

“The dollars and cents and the benefits really do make sense for you as an organization to move to NYSHIP,” concluded Flynn.

The district has an opportunity to join July 1, 2026, and there is no buy-in needed. Formoso explained there is a six-month period needed to complete the switchover. 

Trustee Steven Matlin agreed moving to NYSHIP makes sense, but asked about the nuts and bolts of the changeover because the current plan aligns with the school fiscal year, while NYSHIP goes by the calendar year. Formoso said that would not be a problem.

There were nothing but positive comments about NYSHIP from those on the board who have had personal or family experience with it, and Formoso said their historical rate increases have been significantly lower than what the district has been experiencing.

Trustee Blakeley Lowry asked why, if this is such a slam-dunk now, the change had not been made years ago. Formoso said that was a difficult question, as he had not been with the district at the time, but he knows that expenses had increased dramatically and had not been anticipated. Flynn said there was actually a time when NYSHIP was more expensive than the self-funded plan, but that BCSD’s medical expenses had “shot up a little bit out of nowhere.” She said the district has “some really sick folks, both on the medical and prescription drug side of things,” and it now makes sense to be part of the larger pool.

The board voted to authorize implementing the NYSHIP plan effective July 1.