By Molly Mulebriar
A Texas school district is sitting on a financial time bomb and their self-funded health plan may provide the spark.
District finances look dismal, and their self-funded health plan does too. With an operating budget surplus of only 18 days, a sudden spark within their self-funded health plan can bring the district to it’s knees.
Their health plan is underfunded, and their reserves are not enough to pay IBNR claims and expenses. Yet they have taken no precautionary actions to mitigate their risk. Their stop loss policy provides limited protection incorporating an unusually high retention. They simply have no more money to fund their plan and they lack the political courage to make plan changes.
Their renewal is September 1. They should run away from their self-funded plan as fast as they can before catastrophe strikes. They should beg TRS ActiveCare for permission to join the state government health plan or establish an ICHRA program.
If they don’t take action to prevent the inevitable and the inevitable happens, it will reinforce a growing belief among Texas school officials across the state that self-funding is too risky.
“How can a superintendent or school board, as fiduciaries of taxpayer funds, jeopardize a district’s assets by continued sponsorship of an underfunded, poorly managed and improperly structured self-funded health plan and not take immediate corrective action?
