Is The TSHBP Risk Pool Bankrupt?

The ultimate question will be is there be enough money to honor all eligible claims through August 2024? If not, where is the money going to come from?

The TSHBP Board of Trustees recently approved a cash call to member districts to the tune of an estimated $30 million to make up for unplanned deficits.

Member districts are required to pay an additional $150 per employer per month for up to ten months in order for the pool to honor claim obligations and maintain reserves.

“The TSHBP did not anticipate the significant increase in utilization that they are currently experiencing. As of April 1, 2024 for the 2023-2024 plan year, claims were forecasted at $63.7 million, with an additional $6.3 million budgeted for reserves, totaling $70.0 million. As of April 15, 2024, the TSHBP projections now show a total claim spend of $93.6 million, inclusive of run-out claims. In response to this situation, the TSHBP Board convened on April 9, 2024 and passed a resolution. In anticipation of the expected funding deficit for the 2023-2024 plan year, each TSHBP member school district will be required to make an additional contribution of $150 per month per participating employee starting May 1, 2024. It is anticipated that the additional funding will be needed for nine or ten months, based on current claim projections. TheTSHBP Board will evaluate monthly the claim payments and projections and make any necessary adjustments and inform member districts accordingly.” (SOURCE: May Board Meeting Agenda – Callen ISD).

For many districts this is an unexpected budget buster. One mid-size district has calculated their cash call will exceed $600,000.

Now we learn there will be no TSHBP renewal offer September 1, 2024. Instead, brokers for the TSHBP are scrambling to maintain commissions by shopping each district in the open commercial health insurance market.

“New for the 2024-25 Plan Year, the TSHBP Risk Pool is no longer available. Your district’s renewal packet contains three proposals for your consideration:”

The 90 Degree Benefits Directed Care Plans Proposal provides employees with coverage most similar to what they currently have with the TSHBP Directed Care plans.
Blue Cross/Blue Shield of Texas fully insured High Deductible Blue Choice Plan and Blue Essentials PPO plans.
United Benefits Consortium (UBC) traditional designed HD and PPO plans.

To our knowledge the TSHBP has not provided member districts with detailed financials documenting the need for additional funding. Were any claims paid out-of-contract? Have fixed costs been reasonable and market competitive?

Before honoring their contractual obligations member districts would be well advised to request documentation supporting the need for a cash call, including audited financials, administrative agreements, stop loss insurance policies and copies of E&O policies and fiduciary bonds of all parties involved.

The ultimate question will be is there be enough money to honor all eligible claims through August 2024? If not, where is the money going to come from?

The other question is what are TSHBP districts going to do to replace TSHBP coverage? At this point we imagine these districts are gun shy of any offer as they don’t want to experience another insurance nightmare again. All of them must be staying awake at night dreaming and praying about how to get out of the health insurance business and do what they do best – educate kids.

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