Brownsville ISD Trustees Debate The Value Of Their Health Insurance Broker

Brownsville ISD board members debate the value of their health insurance broker at a Brownsville ISD Insurance Committee Workshop on May 13, 2020.

There is a difference between managing risk and servicing risk. Legacy health insurance brokers provide the later. New era health insurance brokers provide the former leaving TPA’s to service the risk.

BISD’s health plan is self-funded and administered by Blue Cross. There are approximately 7,000 employees covered by the plan.

The presentation showed continued deficit spending supported by general fund transfers to the health plan claim account despite raising employer contributions from $450 pepm to $615 pepm the previous year. This lead to a general discussion of how they could cut fixed costs to save money. There was no discussion of how to reduce claim costs.

Chasing nickels and dimes (fixed costs) and ignoring dollars is not the best risk management strategy. Addressing claim costs which make up 90% of plan spend should be the focus. Cost shifting to plan members is dumb and counter productive. There are better long term solutions.

Paying a broker to bring in those better long term solutions seems reasonable. Paying a broker to hold employee enrollment meetings shouldn’t cost several hundred thousands of dollars especially when BCBS reps. are on hand to perform that function.

The broker subject to the discussion above is still employed the district. Obviously the district sees value in his continued employment, otherwise he wouldn’t be relevant.