creating a better, more efficient healthcare system for your members august 4, 2010

Creating a Better, More Efficient Healthcare System for Your Members

August 4, 2010

The Problem

• San Diego Unified School District is facing unprecedented budget pressures

• Retaining talented employees with competitive salaries is becoming increasingly difficult

• Healthcare costs are continuing to rise• The existing healthcare framework has serious

limitations

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The Solution

• Create a new trust to administer the healthcare needs of your members

• Save $48 million over next five years– Apply savings to protect future wages

and benefits

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VEBA Limitations

• 50 percent of trust, 16 percent of vote

• Subsidization of other school districts

• Lack of accountability, control and flexibility

• One-size-fits-all approach

• Higher premiums

• Only district without retiree coverage

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VEBA vs. EBT

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Projected Annual Cost Savings of New Trust

• $1.3 million: Rerating of early retirees

• $1.7 million: VEBA administrative fee*

• $4.2 million: HMO co-pay modeling

• $1.3 million: Cross-border HMO

• $1.5 million: Self-funding* Based on 2007 numbers. 2009 numbers are $2.67 million

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Five-Year Cumulative Cost Savings

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VEBA Premiums vs. Administrative Fees

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Keenan Experience• 37+ years of experience• 950 California public agency clients• Privately-held, employee-owned• Largest block of public sector business with

Kaiser and Blue Cross• Commitment to product and service innovation• Leader in insurance, employee benefits and

financial solutions for California schools10

California Members CoveredVEBA vs. Keenan

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Benefits to Your Membership

• No changes to the plan

• Reduction in furloughs

• Maintain competitive pay scales

• Preserve benefits

• Maintain co-pay levels

• Keep current doctors

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Timeline/Next Steps

Week of August 2 Meet with all bargaining units

August Schedule meet and confers with SDUSD

September 13 SDUSD votes for new EBT

Jan. 2011 Members realize savings and benefits

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