SAVE MONEY - SOLVE A PROBLEM!

1. SAVE MONEY -SOLVE A PROBLEM! Presented by: Luanne Bauman District Clerk at Victor School District #7 Assisted by:Becky Byrnes and Lindsay Fisher, Sales Representatives for Western States Insurance - Blue Cross/Blue Shield

2. How can you really save some $$$$? What school districts can do to help balance the budget. Thinking outside of the box……..

3. How can you really save some $$$$? • Some of these ideas can be real morale boosters too. • Therefore, production can increase or in the very least make some employees happy.

4. How can you really save some $$$$? One of the biggest challenges (problems) for schools (for anyone) is keeping up with the rising cost of health insurance!

5. How can you really save some $$$$? • Being creative with your health insurance! • Analyze your situation – get to know your employees! • Are your employees reasonably healthy and don’t have any lingering health issues?

6. How can you really save some $$$$? We are going to look at three ways to help your employees help themselves. Giving them options and explaining how those options work, the differences and what worked at Victor School.

7. FLEX ACCOUNTSCAFETERIA PLANS (SECTION 125) • Employee makes a contribution (a selected amount prior to the beginning of the plan year) monthly through payroll. • It is tied to a calendar or school year. No carry over. Use it or lose it. Does go back to the district. • No investment options. • Paid with pre-taxed contributions • The District doesn’t have to pay social security nor medicare

8. Health Savings Accounts • You can open a Health Savings Account (HSA) and contribute an amount as the employee and/or the employer. This amount is treated like a flex account, but is not tied to a calendar year. • Health Insurance Plan must qualify as an eligible plan. • No taxes are paid on the contribution.

9. Health Savings Accounts • Advantages: If you are reasonably healthy you can “save” the contribution amount for a time when you need it for health care or for retirement. • After age 59 ½ you can treat it as a traditional IRA. • You can invest your money in mutual funds or keep the money very liquid in a savings account.

10. Health Savings Accounts • Pre-taxed dollar contributions • Not tied to a calendar year for distributions. • The contributions amounts are limited, but can continue to grow. • Not tied to your employment either

11. Health Savings Accounts • Disadvantages: The money can be withdrawn, but there is a penalty associated with the withdrawl if not for medical expenses. • Must be a high deductible (at least $1200 currently) health insurance plan

12. Health Savings Accounts • Current premium is $400/employee with a $500 deductible, with a $1500 OOP. • HSA premium is $300/empoyee with a $1200 deductible. Then insurance pays 100%. • District would then contribute the extra $100 in the employees account. This would then hold the cost of the premium down and put $1200/year into the employee’s “pocket”.

13. Health Savings Accounts • So at the end of the school year an employee could have $1200 in a savings account to use for their deductible. • Versus MAYBE meeting their $1500 OOP requirements.

14. HEALTH REIMBURSEMENT ARRANGEMENT • Not to be confused with a flex account, health reimbursement account or the health saving account (HSA) that you and/or your employer contributes to and you use it to reimburse yourself for out-of-pocket medical expenses.

15. HEALTH REIMBURSEMENT ARRANGEMENT • These accounts are set up for the employer (district) to be partially self -insured.

16. HEALTH REIMBURSEMENT ARRANGEMENT • Prior year you had a $500 deductible health insurance plan. $1500 maximum out-of-pocket amount. Paid out at 80/20 by the insurance company. • With an HRA the employee has a $500 deductible health insurance plan. $1500 maximum out-of-pocket amount. Paid out at 80/20 by the district.

17. HEALTH REIMBURSEMENT ACCOUNTS • It’s funded as though it was really a $1000 deductible. The premiums are less than if the deductible was $500. The savings then would be deposited into fund 85 with a project number. Paid as needed. Each employee amount saved would be coded to be paid to the District at each payroll. • Actuaries show that only 25% of employees really reach their deductible amount. Victor actuaries showed only 12% average in the prior three years. This year we only had 4% reach their deductible.

18. HEALTH REIMBURSEMENT ARRANGEMENT The calculations have been massaged to make the math easier to understand, but the calculations are NOT an easy 80/20 split. Sample: Current Health Insurance ($500 Ded, $1500 OOP 80/20) $1000 MEDICAL BILL $500 – employee’s responsibility $100 – employee’s responsibility (20% of $500) $400 – Insurance Company’s responsibility (80% of $500)

19. HEALTH REIMBURSEMENT ARRANGEMENT Sample: Proposed HRA Health Insurance ($500 Ded employee, $500 District 80/20) $1000 MEDICAL BILL $500 – employee’s responsibility $100 – employee’s responsibility (20% of $500) $400 – District’s responsibility (80% of $500)

20. HEALTH REIMBURSEMENT ARRANGEMENT Sample: Current Health Insurance ($500 Ded, 80/20 - $1500 out-of-pocket) $15,000 MEDICAL BILL $500 – employee’s responsibility $300 – employee’s responsibility (20% of $1500) $1200 – Insurance Company’s responsibility (80% of $1500) $13,000 – Insurance Company’s responsibility

21. HEALTH REIMBURSEMENT ARRANGEMENT Sample: Proposed HRA Health Insurance ($1000 Ded ($500 employee and $500 district), 80/20 $1500 OOP) $15,000 MEDICAL BILL $500 – employee’s responsibility $300 – Employee’s responsibility (20% of $1500) $1,200 – District’s responsibility (80% of $1500) $13,000 – Insurance Company’s responsibility

22. HEALTH REIMBURSEMENT ARRANGEMENT • Keep in mind that with our current carrier the employee has a co-pay of $25 for every doctor visit (this is not applied to their deductible). • All the bells and whistles of the wellness program. • Therefore, the employee is only using the HRA for major health issues.

23. HEALTH REIMBURSEMENT ARRANGEMENT • If the savings in premium per employee per month is $50, then for 50 employees the District would save $2500 per month or $30,000 per year. • If 25% of your 50 employees reach and use there maximum out-of-pocket amounts. The District would be liable for $20,000. Still leaving a savings of $10,000 per year.

24. HEALTH REIMBURSEMENT ARRANGEMENT • Victor School currently has 52 employees that are eligible for insurance, 27 employees participating in this plan. The remaining employees are in a HSA. • Only the certifieds are in a union. • The CBA is written to the benefit of the district. This keeps insurance affordable for employees (both certified and classified) paying for their families. And allows the district to provide salary increases.

25. HEALTH REIMBURSEMENT ARRANGEMENT • Need to establish a line item in your budget of the possible liability to be fiscally sound. This is especially important the first year before you have established a fund balance to cover your liability.

26. HEALTH REIMBURSEMENT ARRANGEMENT AS OF May 31, 2011 DEPOSITS = $17,090.13 CLAIMS = $1,939.21 FUND BALANCE $15,150.92 At this rate Victor School should have a fund balance at the end of June of approximately $23,700.

27. OTHER IDEAS? How can we increase our free and reduced rates?

28. OTHER IDEAS? • Set up a table at Parent/Teacher conferences, open house etc. Tell your parents about the advantages of F&R. • Send home a slip attached to the F&R form that must be signed by the parent/guardian so that they acknowledge that they really did receive the paperwork.

29. OTHER IDEAS? This notice is attached to the Free & Reduced Packet that goes home with the students. This way we know that the student’s parent/guardian received it. IMPORTANT!!!!! Please complete this entire packet and return to school even if you choose to not participate. X ___________________(students name) X ___________________(grade) X ___________________(teacher)

30. OTHER IDEAS? • Include in your newsletters the implications of filling out the F&R forms, whether or not your child eats lunch at school. • Grants, e-rate, federal breakfast and lunch reimbursement rates, etc…. • Victor offers a free breakfast to all. We currently are at a 73% F&R rate.

31. OTHER IDEAS? • Victor School was the first to adopt the four day school week . Some savings, but very helpful in other ways (attendance, discipline, etc). I have a power point for that presentation too. • Bio-mass heating system (second in the state to install). We now have two sources of heat (natural gas and wood chips). We have been getting USDA funding to offset some of the wood chip expense.

32. PROBLEMS SOLVED Cash left in rooms, desks, cars, etc… Handed to other teachers, students, athletic director or you as you walk by…….. Do you have to be at everything to open a safe or “take care of the money”?

33. JUST SOME GOOD IDEAS! • Lock boxes for your staff to store money for their fund raisers, game workers, concessions, adult education classes, etc…. • A place to drop anything of importance. • Eliminates the need to store anything in the classroom, at home or having to have someone open the “safe”.

34. JUST SOME GOOD IDEAS!

35. JUST SOME GOOD IDEAS! • Credit/debit card machines for food service, concessions, activity fees, etc. • Procurement Cards (P-cards)

36. JUST SOME GOOD IDEAS!

37. JUST SOME GOOD IDEAS! • Student Handbooks are on-line. Parent/guardian must sign off that the have read it or request a copy to read. Saves lots of copying. • First day of school teachers go over key elements. • New students all get the appropriate level handbook. • Sample: Incoming 9th graders get the high school student handbook.

38. JUST SOME GOOD IDEAS! • Annual gathering of information – could easily just be verified. This eliminates the mad rush to get all the “new” information into the system. You only have to look for items that changed. If nothing has changed then the page is marked and filed as permanent data.

40. JUST SOME GOOD IDEAS! • Twitter account for updating news releases. Not to take place of auto-dialers. Sample: Coaches/advisors can twitter when the bus will be arriving so parents can come and pick up their kids. • Auto-Dialers

41. JUST SOME GOOD IDEAS! TRACKING INVENTORY - NOT FIXED ASSETS. HOW DO WE KEEP TRACK OF EVERYTHING (NOT TO MENTION THE KEYS) IN THE SCHOOL – JOB IMPOSSIBLE!

42. JUST SOME GOOD IDEAS! • Inventory tracking system. Hand held barcode reader. It gives the District the current value of any room, building or the whole District. • Does put the responsibility of the items in the room on the person in charge of that room.

43. JUST SOME GOOD IDEAS! • Able to track keys to file cabinets, desks and other “furniture” items. • Allows new staff to know exactly what they have to work with. • Can give to the insurance company, a list of everything in a room and it’s value.

44. JUST SOME GOOD IDEAS! • Key system has a hierarchy. • Grand Masters, Masters, Teachers, Coaches and Specialty Keys • Padlocks – Masters, Teachers and Coaches and Specialty Keys

45. JUST SOME GOOD IDEAS! WE CAN’T KEEP UP WITH ALL THE SCHEDULING THAT IS GOING ON! TOO MANY PEOPLE ARE ADDING ACTIVITIES/EVENTS AND BOOKING ROOMS, VEHICLES, ETC. WITHOUT EVERYONE ELSE KNOWING WHAT’S GOING ON!

46. JUST SOME GOOD IDEAS! • We use GOOGLE CALENDAR. One person does all the entries. Everyone has access to it, but as a read only file. • Each room and each person are colored coded. A weeks worth of activities is printed for the custodial staff in advance. • You can invite attendees to an event or activity and they will need to respond and/or add it to their calendar.

47. JUST SOME GOOD IDEAS! • Updated in real time (so as soon as something is updated – everyone can see it, don’t have to wait to upload). • We have a link on our website so anyone can access it as a read only calendar. Please check it out at www.victor.k12.mt.us • We have an administration meeting every Tuesday morning at 8:15am and we all go over the calendar together and make changes as needed.

48. DOES ANYONE HAVE ANY GOOD IDEAS THEY WOULD LIKE TO SHARE?

49. THANK YOU FOR YOUR TIME AND COMMENTS I will post this power point to our website at www.victor.k12.mt.us under MASBO. If you would like to talk, please feel free to call me at 406-642-3221 or email bauman@victor.k12.mt.us