The Washoe County School District Board of Trustees voted Tuesday night to renew contracts with Renown Hospital and its insurance arm while also beginning the process of scouting out alternative options over the next year to address the long-term solvency issues of its health insurance fund.
After little discussion, trustees voted unanimously to direct the superintendent to begin a competitive request for proposals process over the next year to explore other health-care options for employees and retirees as the district grapples with the rising costs of health care and an insurance fund balance that isn’t keeping up. They then voted to approve three-year contracts with Renown and Hometown Health with the understanding that those contracts also contain 120-day exit clauses that would allow them to pursue an alternative if and when one is found.
The move comes just two weeks after board members decided to delay renewing the two contracts because they decided they also wanted to initiate a request for proposals process. The district’s attorney had raised concerns about doing so at the last meeting because the topic of exploring other insurance options was not listed on the agenda and voting on it may have been a violation of the Open Meeting Law.
Over the next few months, district staff said, they will solicit elements of a complete health-care plan including hospital, claims administration, pharmacy, eye care, dental and other health-care services offered by the district for the 2020 plan year. For the last three years, the school district has had exclusive contracts with Renown to provide hospital services and with Hometown Health to act as the third-party administrator, responsible for processing the claims, negotiating provider contracts and more.
Saint Mary’s Health Network, which had held the longstanding contract to provide coverage to district employees, cried foul about the renewal process for the Renown and Hometown Health contracts this year, saying that it could provide health care more cost effectively but hadn’t been given a fair shot to prove to the district that it could do so. Amber Norris, director of business development and marketing for Saint Mary’s, said at the meeting that the request for proposal is “a move in the right direction” and that the health network looks forward to submitting its proposal.
“We thank you for your consideration and the transition back to health-care choice,” Norris said.
Although no Renown representatives spoke at the Tuesday meeting, Hometown Health CEO and Renown Health Senior Vice President Ty Windfeldt said in a statement on Friday that the companies remain “committed to a successful partnership with the Washoe County School District and the members it serves.”
“We are confident in our ability to provide Washoe County School District employees, teachers, retirees, and their families with access to the highest quality, most comprehensive, convenient and largest provider network access across all 14 northern Nevada counties at the most affordable prices,” Windfeldt said.
Until the request for proposals process is complete, school district employees will continue to be covered through Renown and Hometown Health. The contracts with Renown will cost the school district about $19.5 million, while the Hometown Health contract will cost another $1 million, in total, a $90,000 increase over the contracts’ cost last year.
The trustees also voted Tuesday night to approve a recommended 10 percent increase in health insurance premiums with the goal of helping, but not resolving, the financial strain on its health insurance fund. The school district currently pools the premiums it collects into a special fund out of which it pays health insurance claims, but rising health-care costs have stretched the fund thin.
The 10 percent increase will help the district meet some of the rising costs cover the next year but still falls short of the 12.96 percent increase recommended by the district’s health insurance broker. The trustees had sent the initial 10 percent recommendation back to the district’s group insurance committee for further evaluation, which then kicked the same 10 percent recommendation back to the board.
As they did at their last meeting, trustees continued to express concern about not fully addressing the fund’s balance. However, they praised the insurance committee for taking another look at the proposal and remained hopeful that the request for proposals process would give the district a chance to look at other options in addressing employees’ health-care needs in the long term.
“It was a tough job, a tough job, and I know you guys did it well,” Trustee Debra Feemster said. “We’re very proud of you and we respect your decision.”