Starting Jan. 1, as many as 10,000 active and retired East Baton Rouge Parish school employees are going to see their monthly medical insurance bills increase.
With little discussion, the parish School Board on Wednesday voted unanimously to pass along these premium hikes, ranging from $6 to $57 depending on the plan that employees are using.
Employee enrollment for medical plans will occur later this fall.
Representatives with Mercer Human Resources Consulting on Wednesday gave a short presentation to the board on the changes.
Mercer estimates the cost of all employee medical care will increase from about $81.5 million to $88.5 million, an almost 9 percent increase.
Mercer recommended, and the board agreed, that premiums should increase by a slightly higher percentage, 9.8 percent on average, to cover the expected increased cost.
In 2011, employees paid roughly 75 percent of costs, while employees covered the remaining 25 percent. That 75/25 split is preserved in 2012, with both the school system and the employees paying more money for medical care, Mercer estimates.
To cover its share, the school system is using $6 million of a surplus it had generated in years past.
The smallest premium increase, $6 per month, will be for active unmarried employees, with no dependent children, in the most basic “Core” plan. The biggest premium increase, $57 per month, will hit retired employees who don’t receive Medicare, who have their spouses and children enrolled, and who participate in the more generous “Buy Up” plan.
The school system also plans to continue to use Blue Cross Blue Shield of Louisiana and its network for “medical administrative services” for the next three years. Blue Cross was one of four companies that offered proposals to be the network for the school system. It beat out one finalist, Cigna.
In its presentation, Mercer noted that Blue Cross agreed to cut its proposed fee by $500,000 a year, keeping it the same as its current fee, in order to keep the school system’s business. Even so, Cigna’s $3 million proposed annual fee is a half million dollars more than Blue Cross’.
In its analysis, Mercer found that both Blue Cross and Cigna had a roughly equal number of medical providers participating in their networks. The exception was in specialists where Blue Cross has more than double the number of specialists in its network compared to Cigna.