The Hitchhikers guide to employee benefits

Knowing the basics of insurance and how it works is the key to selecting the best plan for your school district, says Chuck Nelson of the ASBA Insurance Trust.  Nelson gave a detailed primer of how insurance plans work, including choices, deductibles, co-insurance and out of pocket expenses.  Calling it “the hitchhiker’s guide to employee benefits”, he encourages districts to reach their destination economically and safely.

He spent much time discussing fixed costs (10% of insurance expenses) vs. variable costs (90%) and how districts can manage the 90% which can translate into controlling their expenses, or  their insurance company’s profits.  Districts that are self-funded can take any surpluses and impact future costs.    

Nelson also explained Preferred Provider Organizations (PPOs), Health Management Organizations (HMOs) and Health Savings Account (HAS) plans, which he suggests are becoming more popular.  Also known as High Deductible Health Plans, the employee and often the employer contributes to the HSA account, which covers deductibles.  The employee owns the account and takes responsibility for his health costs.  Funds contributed are pre-taxed for the employee, surpluses roll over each year, and upon retirement or termination, the account stays with the employee.