elcsd insurance survey report 2013

East Liverpool City Schools

Health Insurance Survey Of

Selected Peer Districts

At September 2013

Prepared For the East Liverpool City

School District Board of Education

November 14, 2013

By:

K-12 Business Consulting, Inc.

Christopher Mohr, MBA, RSBA, CGFM ~ President

Dale Miller, CPA ~ Associate

www.k12consulting.net

East Liverpool City Schools – Health Insurance Survey

TABLE OF CONTENTS

CONTENTS PAGE

Executive Summary i

Purpose of Survey and Peer Group Districts Selected for the Survey 1

Table 1 Health Insurance Survey Peer Group Districts 1

Health Insurance Survey Design 1

Key Findings of Survey 2

Cost of Health Insurance as a Percentage of Wages Paid FY12 2

Figure 1 Peer Group Percentage of Health Care Costs to Wages FY12 3

Figure 2 Peer Group Total Fringe Benefit Expenses as a % of Wage Expense FY12 4

Comparison of Family and Single Medical & Prescription Drug Insurances 4

Figure 3 Peer Group Monthly Family Medical Insurance Coverage at September 2013 5

Figure 4 Peer Group Percentage of Family Medical Insurance Coverage at September 2013 5

Figure 5 Peer Group Monthly Single Medical Insurance Coverage at September 2013 6

Figure 6 Peer Group Percentage of Single Medical Insurance Coverage at September 2013 7

Figure 7 Peer Group Monthly Family Dental Insurance Coverage at September 2013 8

Figure 8 Peer Group Percentage of Family Dental Insurance Coverage at September 2013 8

Figure 9 Peer Group Monthly Single Dental Insurance Coverage at September 2013 9

Figure 10 Peer Group Percentage of Single Dental Insurance Coverage at September 2013 10

Figure 11 Peer Group Monthly Family Vision Insurance Coverage at September 2013 11

Figure 12 Peer Group Percentage of Family Vision Insurance Coverage at September 2013 11

Figure 13 Peer Group Monthly Single Vision Insurance Coverage at September 2013 12

Figure 14 Peer Group Percentage of Single Vision Insurance Coverage at September 2013 13

Affordable Care Act Cadillac Tax Insurance Projector for 2013 through 2022 13

Table 2 Affordable Care Act Cadillac Tax Projector Family Insurance Premiums 14

Figure 15 Projection of Family Insurance Premiums at 7% Trend to 2018 14

Table 3 Affordable Care Act Cadillac Tax Projector Single Insurance Premiums 15

Figure 16 Projection of Single Insurance Premiums at 7% Trend to 2018 15

Schedule of Medical Benefits 16

Table 4 Schedule of Medical Benefits 17

East Liverpool City Schools – Health Insurance Survey

Executive Summary Page i

Executive Summary

The purpose of this Health Insurance Survey is to comply with the Board of Education’s request to

objectively compare the East Liverpool City School District’s (ELCSD) health insurance costs and benefit

levels with other specifically identified locally proximate districts. The reason for the focus on health care

cost is that the district received data from an independent study received August 26, 2013 that showed

district fringe benefits as a percent of wages paid was essentially 50%, which is 9 percentage points higher

than the district state group amount of 41%. In a geographically local comparison with other districts the

district was 4 percentage points higher than selected peer group districts which had an average of 46%. The

peer group districts were selected because they are of a relative similar size in terms of student enrollment.

It is clear, whether in a local or state wide comparison of similar school districts; the East Liverpool City

School District has health care costs that are on average higher than other districts. With the upcoming 40%

Cadillac Tax on health care costs imposed by the Affordable Care Act effective in 2018, it is very important

to the long-term financial stability of the district to gain an understanding of its health care costs and how

other school districts are managing these costs.

Key Findings of the Survey The following are the key findings of the health care cost survey:

Most districts in the peer group are below state average for employee percentage contributions for

family and single medical and prescription drug insurance. Statewide family average employee

contributions are 13.10% and the group average was 7.92%. Statewide average single employee

contribution rate is 12.2% and the group average is 7.9%. East Liverpool contribution rates are

7.5% for both family and single medical insurance. These findings suggest employees should pay a

higher percentage of medical insurance costs. This is true for East Liverpool as well. While the

recent increase to 7.5% is a step in the right direction, employee contributions are routinely 13% to

15% of premiums which is well below private sector employee’s contribution to health care. On

October 21, 2013 the Society of Human Resource Management issued a report showing that private

sector employees will be asked to contribute 22% of the cost of health care premiums.

Medical insurance premiums for districts in the comparison group, with the exception of Beaver

Local, are generally higher than state averages and in some cases considerably higher. See Figures

3 and 5 for specific details. There are likely several key causes but low employee contributions to

premiums and low deductibles and Out-of-Pocket Maximums are likely two significant contributors

to the increased costs. This is true for East Liverpool as well where deductibles and Out-of-Pocket

Maximums are very low compared to state benchmarks and other peer group districts. See Table 4

at the end of this report for more details.

Dental and vision insurances appear to be mostly in line with statewide averages for both family

and single coverage’s for all school districts in the study.

Most districts in the comparison study need to be mindful of the 2018 Cadillac Tax that will be

implemented as a result of the Affordable Care Act. Projections show a high likelihood that most

districts in the comparison, including East Liverpool, will be impacted by the Cadillac Tax for both

family and single coverage’s by 2018. See Tables 2 and 3 and Figures 15 and 16 for assumptions

and calculations showing reason for the concern.

The East Liverpool City School District expresses thanks to the treasurers of each Peer Group Districts for

their enthusiastic response to this survey. It would not be possible without their cooperation.

East Liverpool CSD– Health Insurance Survey

1

District County ADM

Poverty as

% of ADM

% of

Population

Administra

tive or

Profession

al

Occupation

s

Median

Income

% of

Populati

on with

College

Degree

or More

%

Agricultu

ral

Property

Populati

on

Density

Non-

Residenti

al & Non-

Agricultu

ral Per

Pupil

%

Minority

Students

East Liverpool City Columbiana 2,213 56.9 21.4 24,992 18.0 2.3 1,223.0 16,326 13.2

Beaver Local Columbiana 2,063 45.5 26.4 30,554 19.2 20.4 143 23,965 2.4

Salem City Columbiana 2,093 47.9 24 26,403 21.5 2.6 940 41,583 3.6

Steubenville City Jefferson 2,253 66 26.2 23,217 21.7 0.3 2193 24,492 41.7

St Clairsville-Richland CityBelmont 1666 28.6 31.7 32,897 25 8 213 71,129 7.1

Cambridge City Guernsey 2361 63.9 24.8 22,963 17.6 7.1 209 30,828 9

Martins Ferry City Belmont 1565 56.2 24.9 25,096 20.2 6.9 395 16,181 11.9

Harrison Hills City Harrison 1631 50.5 19.9 27,603 16.1 43.8 37 30,150 6.3

Purpose of Survey and Peer Group Districts Selected for the Survey

The purpose of this Health Insurance Survey is to comply with the Board of Education’s request to

objectively compare the East Liverpool City School District’s (ELCSD) health insurance costs and benefit

levels with other similarly sized school districts that are located geographically close. Through the survey

process the district is seeking to gain insight into health care costs by:

1) Determining amounts paid by each district and their employees for Medical, Dental and Vision

Insurance Coverage’s compared to ELCSD.

2) Identifying significant deductible and out-of-pocket cost differences in medical coverage between each

district and ELCSD.

3) Determining if ELCSD’s rank in terms of costs reveals any areas of potential savings the district could

explore.

The main comparison group for this health insurance survey will be referred to as the “Peer Group” and is

made up of districts identified by the administration as good benchmarks for comparative purposes within

its region. These school districts are noted in Table 1 below. This group is mostly a geographic comparison

group to be a point of reference and even though these districts have socio-economic, demographic and

student enrollment differences, the cost data gathered for their health insurances are comparable.

Table 1: Health Insurance Survey Peer Group Districts Based on ODE Data for FY12

Source: ODE Data Warehouse FY12

Health Insurance Survey Design

After the Peer Group Districts were selected a spreadsheet was created to send to each district asking for

their most current health insurance costs for medical & prescription, dental and vision coverage’s. The

data was requested in a monthly cost format for single and family coverage, employee and employer share

of premium and the premium effective date. In addition, the Peer Group Districts were asked to provide

the “Schedule of Benefits” for the medical insurance plans so a comparison of key cost factors such as

deductible and out of pocket amounts could be compared.

Once this data was prepared an email was sent by the treasurer of ELCSD to each of the Peer Group

District treasurers. This request was sent on September 9, 2013 to each of the district treasurers. All Peer

Group districts responded with health insurance cost data by October 3, 2013. For Schedule of Medical

Insurance Benefit data six (6) peer districts responded.


2

The East Liverpool City School District expresses thanks to the treasurers of each Peer Group Districts for

their enthusiastic response to this survey. It would not be possible without their cooperation.

The final major source of data referred to in this report is the State Employee Relations Board 2013 21st

Annual Report on the Cost of Health Insurance in Ohio’s Public Sector. The report was released in the

Spring of 2013 and contains a mix of premium information from late 2012 and early 2013. It is the most

authoritative data available on school system health care costs available. 97.2% or 700 of the 720 school

districts and ESCs in the state responded to the survey which constituted this report.

Key Findings of the Survey

Most districts in the peer group are below state average for employee contributions to family and

single medical and prescription drug insurance. Statewide family average employee contributions

are 13.10% and the group average was 7.92%. Statewide average single employee contribution

rate is 12.2% and the group average is 7.9%. East Liverpool contribution rates are 7.5% for both

family and single medical insurance. These findings suggest employees should pay a higher

percentage of medical insurance costs. This is true for East Liverpool as well. While the recent

increase to 7.5% is a step in the right direction, employee contributions are routinely 13% to 15%

of premiums.

Medical insurance premiums for districts in the comparison group, with the exception of Beaver

Local, are generally higher than state averages and in some cases considerably higher. See

Figures 3 and 5 for specific details. There are likely several key causes but low employee

contributions to premiums and low deductibles and Out-of-Pocket Maximums are likely two

significant contributors to the increased costs. This is true for East Liverpool as well where

deductibles and Out-of-Pocket Maximums are very low compared to state benchmarks and other

peer group districts. See Table 4 at the end of this report for more details.

Dental and vision insurances are for the most part in line with statewide averages for both family

and single coverage’s for those districts who participate in these benefits.

Most districts in the comparison study need to be mindful of the 2018 Cadillac Tax that will be

implemented as a result of the Affordable Care Act. Projections show a high likelihood that most

districts in the comparison, including East Liverpool, will be impacted by the Cadillac Tax for

both family and single coverage’s by 2018. See Tables 2 and 3 and Figures 15 and 16 for

assumptions and calculations showing reason for the concern.

Cost of Health Insurance as a Percentage of Wages Paid in FY12

Figure 1 and 2 show the percentage of health insurances to wages paid in FY12 for each of the districts.

Health insurance as a percentage of wages ranged from a low of 12.5% to a high of 23% and a

group average of 17%.

East Liverpool is at the high side of the peer group and is roughly 4% above the average is the

peer group.


3

Figure 1: Peer Group Percentage of Health Care Cost to Wages FY12

*Source: Ohio Department of Education Data Warehouse FY12

Table 2 shows total fringe benefits to wages ranging from 38% to a high of 54%.

East Liverpool percentage of total fringe benefits is essentially50% of each dollar spent on wages.

The average in the comparison group is 38%.

With a state average of 41% and the local group average of 38% East Liverpool insurance costs

are likely to be the major driver of this higher percentage.

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Peer Group Comparison % Health Insurance to Wage FY12

Health Care % of Wages


4

Figure 2: Peer Group Total Fringe Benefit Expenses as a % of Wage Expense FY12

*Source: Ohio Department of Education Data Warehouse FY12

Comparison of Family and Single Medical & Prescription Drug Insurances

The next several tables show comparisons of monthly premiums in effect at the date of this report for

family and single insurances coverage. Coverage’s shown are medical & prescription, dental and vision

insurances along with the percentage of total monthly premium paid by employees.

Figure 3 shows a monthly family insurance cost from a low of $1,222 to a high of $2,041. That is

an annual cost of $14,664 to a high of $24,492.

The state average monthly cost for school districts with ADM of 1,000 to 2,499 was $1,378 per

month or $16,500 annually.

Group average without East Liverpool in the total for family coverage is $1,657 per month or

$19,884 annually.

East Liverpool is $72 per month or $864 annually higher than the group average and $351 per

month or $4,212 annually higher than the state average for all school districts.

Figure 4 shows the percentage of family insurance paid by employees for family coverage. This

ranges from 2.5% to 12.15% in the peer group. The East Liverpool average is 7.5%.

The peer group employee cost average without East Liverpool is 7.92%.

Statewide average employee cost for all school districts is 13.10% for family insurance coverage.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Pe

rso

nn

el S

erv

ice

Co

sts

as %

of

Tota

l Co

sts

Frin

ge B

en

efi

ts a

s a

% o

f W

age

s Peer Group Fringes Benefits as % of Wages FY12

Fringe/Wages Total PS


5

Figure 3: Peer Group Monthly Family Medical Insurance Coverage at September 2013

Beaver State Avg.St.

ClairsvilleSalem

EastLiverpool

CambridgeHarrison

HillSteubenvil

leMartins

Ferry

Bd Share $1,100 $1,191 $1,293 $1,376 $1,599 $1,570 $1,728 $1,780 $1,837

Emp Share $122 $187 $120 $120 $130 $217 $91 $45 $204

Fam Total $1,222 $1,378 $1,413 $1,495 $1,729 $1,787 $1,819 $1,825 $2,041

$0

$500

$1,000

$1,500

$2,000

$2,500

Family Medical & Drug Coverage ELCSD Insurance Survey October 2013

Bd Share Emp Share Fam Total

(1)

(1) SERB 2013 21st Report on Cost of Health Insurance - Data is for school districts with ADM 1,000 - 2,499 . N=328 responses.

*Source: Insurance Survey responses from each district

Figure 4: Peer Group Percentage of Family Medial Insurance Paid By Employees September 2013

2.47%

5.00%

7.50%8.00%

8.50%

10.00% 10.00%

12.15%

13.10%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

Family Medical & Drug Coverage ELCSD Insurance Survey October 2013

Employee %



6

Figure 5 shows a monthly single insurance cost from a low of $527 to a high of $821. That is an

annual cost of $6,324 to a high of $9,852.

The state average monthly cost for school districts with ADM of 1,000 to 2,499 was $538 per


Group average without East Liverpool in the total for single coverage is $706 per month or $8,472

annually.

East Liverpool is $52 per month or $624 annually higher than the group average and $220 per

month or $2,640 annually higher than the state average for all school districts.

Figure 6 shows the percentage of family insurance paid by employees for single coverage. This

ranges from 2.55% to 12.15% in the peer group. East Liverpool’s average is 7.5%.

The peer group average employee cost without East Liverpool is 7.90%.

Statewide average employee cost for all school districts is 12.2% for single insurance coverage.

Figure 5: Peer Group Monthly Single Medical Insurance Coverage at September 2013

Beaver State Avg.St.

ClairsvilleSalem

EastLiverpool

CambridgeSteubenvill

eMartins

FerryHarrison

Hill

Bd Share $474 $474 $549 $566 $701 $684 $764 $734 $780

Emp Share $53 $64 $51 $49 $57 $95 $20 $82 $41

Total Cost $527 $538 $600 $616 $758 $778 $784 $816 $821

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900Single Medical & Drug Coverage ELCSD Insurance Survey October 2013

Bd Share Emp Share Total Cost

(1)

(1) SERB 2013 21st Report on Cost of Health Insurance - Data for all school districts with ADM 1,000 - 2,499 . N=328 responses.



7

Figure 6: Peer Group Percentage of Single Medial Insurance Paid By Employees September 2013

2.55%

5.00%

7.50%8.00%

8.50%

10.00% 10.00%

12.15% 12.20%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

Single Medical & Drug Coverage ELCSD Insurance Survey October 2013

Employee %


Comparison of Family and Single Dental Insurances

The next several tables show comparisons of monthly premiums in effect at the date of this survey for

family and single dental insurances coverage.

Figure 7 shows a monthly family dental insurance cost from a low of $61 to a high of $193. That

is an annual cost of $732 to a high of $2,316.



Group average without East Liverpool in the total for family dental coverage is $87 per month or

$1,049 annually.

East Liverpool is $18 per month or $221 annually lower than the group average and $10 per

month or $120 annually lower than the state average for all school districts.

Figure 8 shows the percentage of family dental insurance paid by employees for family coverage.

This ranges from 0% to 100% in the peer group. East Liverpool’s average is 7.5% employee cost.


Statewide average employee cost for all school districts is 15% for family dental insurance

coverage.


8

Figure 7: Peer Group Monthly Family Dental Insurance Coverage at September 2013

St.Clairsville

Steubenville

HarrisonHill

MartinsFerry

EastLiverpool

Beaver Cambridge State Avg. Salem

Bd Share $56 $63 $0 $66 $64 $73 $83 $78 $177

Emp Share $5 $0 $66 $0 $5 $8 $0 $13 $15

Fam Total $61 $63 $66 $66 $69 $81 $83 $91 $193

$0

$50

$100

$150

$200

$250

Family Dental Coverage ELCSD Insurance Survey October 2013


(1)

(1) SERB 2013 21st Report on Cost of Health Insurance - Data is for school districts statewide. N=456 responses.


Figure 8: Peer Group Percentage of Family Dental Insurance Paid By Employees September 2013

0.00% 0.00% 0.00%

7.50% 8.00% 8.50% 10.00%15.00%

100.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

Family Dental Coverage ELCSD Insurance Survey October 2013

Employee %



9

Figure 9 shows a monthly single dental insurance cost from a low of $22to a high of $78. That is

an annual cost of $264to a high of $936.


month or $432 annually.

Group average without East Liverpool in the total for single dental coverage is $46 per month or

$552 annually.

East Liverpool is $15 per month or $180 annually lower than the group average and $5 per month

or $60annually lower than the state average for all school districts.

Figure 10 shows the percentage of single dental insurance paid by employees for single coverage.



Statewide average employee cost for all school districts is 14.80% for single dental insurance

coverage.

Figure 9: Peer Group Monthly Single Dental Insurance Coverage at September 2013

HarrisonHill

Steubenville

EastLiverpool

Beaver State Avg. CambridgeSt.

ClairsvilleMartins

FerrySalem

Bd Share $0 $27 $28 $28 $31 $36 $56 $66 $72

Emp Share $22 $0 $2 $3 $5 $0 $5 $0 $6

Total Cost $22 $27 $31 $31 $36 $36 $61 $66 $78

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

Single Dental Coverage East Liverpool Insurance Survey October 2013


(1)

(1) SERB 2013 21st Report on Cost of Health Insurance - Data is for school districts statewide. N=441 responses



10

Figure 10: Peer Group Percentage of Single Dental Insurance Paid By Employees September 2013

0.00% 0.00% 0.00%

7.50% 8.00% 8.50% 10.00%14.80%

100.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

Single Dental Coverage ELCSD Insurance Survey October 2013

Employee %


Comparison of Family and Single Vision Insurances

The next several tables show comparisons of monthly premiums in effect at the date of this survey for

family and single vision insurances coverage.

Figure 11shows a monthly family vision insurance cost from a low of $7.75 to a high of $27.19.

That is an annual cost of $93.00 to a high of $326.28.

The state average monthly cost for school districts with ADM of 1,000 to 2,499 was $21.02 per

month or $252.24 annually.

Group average without East Liverpool in the total for family vision coverage is $18.81 per month

or $225.72 annually.

East Liverpool is $11.06 per month or $132.72 annually lower than the group average and $13.27

per month or $159.24 annually lower than the state average for all school districts.

Figure 12 shows the percentage of family vision insurance paid by employees for vision coverage.

This ranges from 0% to 63.99% in the peer group. East Liverpool’s average is 7.5% employee

cost.

The peer group average employee costs without East Liverpool is 33.84%.

Statewide average employee cost for all school districts is 22.8% for family vision insurance

coverage.


11

Figure 11: Peer Group Monthly Family Vision Insurance Coverage at September 2013

St.Clairsville

Steubenville

EastLiverpool

Cambridge Salem BeaverHarrison

HillState Avg.

MartinsFerry

Bd Share $0.00 $0.00 $7.17 $12.42 $15.00 $17.50 $7.50 $16.52 $9.79

Emp Share $0.00 $0.00 $0.58 $0.00 $0.00 $1.94 $12.48 $4.50 $17.40

Fam Total $0.00 $0.00 $7.75 $12.42 $15.00 $19.44 $19.98 $21.02 $27.19

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

Family Vision Coverage ELCSD Insurance Survey October 2013


(1)


N

o

t

o

f

f

e

r

e

d

N

o

t

o

f

f

e

r

e

d


Figure 12: Peer Group Percentage of Family Dental Insurance Paid By Employees September 2013

0.00% 0.00%

7.50%9.98%

22.80%

62.46% 63.99%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Family Vision Coverage ELCSD Insurance Survey October 2013

Employee %

N

o

t

o

f

f

e

r

e

d

N

o

t

o

f

f

e

r

e

d



12

Figure 13 shows a monthly single vision insurance cost from a low of $3.09 to a high of $15. That

is an annual cost of $37.08 to a high of $180.

The state average monthly cost for school districts with ADM of 1,000 to 2,499 was $9.02 per

month or $108.24 annually.

Group average without East Liverpool in the total for single vision coverage is $9.35 per month or

$112.20 annually.

East Liverpool is $6.26 per month or $75.12 annually lower than the group average and $5.93 per

month or $71.16 annually lower than the state average for all school districts.

Figure 14 shows the percentage of single vision insurance paid by employees for single coverage.



Statewide average employee cost for all school districts is 20.80% for single vision insurance

coverage.

Figure 13: Peer Group Monthly Single Vision Insurance Coverage at September 2013

St.Clairsville

Steubenville

EastLiverpool

CambridgeHarrison

HillBeaver State Avg.

MartinsFerry

Salem

Bd Share $0.00 $0.00 $2.86 $5.41 $7.50 $7.73 $7.25 $9.79 $15.00

Emp Share $0.00 $0.00 $0.23 $0.00 $0.48 $0.86 $1.77 $0.00 $0.00

Total Cost $0.00 $0.00 $3.09 $5.41 $7.98 $8.59 $9.02 $9.79 $15.00

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

Single Vision Coverage East Liverpool Insurance Survey October 2013


(1)


N

o

t

o

f

f

e

r

e

d

N

o

t

o

f

f

e

r

e

d



13

Figure 14: Peer Group Percentage of Single Vision Insurance Paid By Employees September 2013

0.00% 0.00% 0.00%

6.02%7.44%

10.01%

20.80%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Single Vision Coverage ELCSD Insurance Survey October 2013

Employee %

N

o

t

o

f

f

e

r

e

d

N

o

t

o

f

f

e

r

e

d


Affordable Care Act Cadillac Tax Insurance Projector for 2013 through 2022

Table 2 and 3 along with Figure 15 and 16 on the following pages are presented to project where each of

the peer group districts may be in 2018 when the “Cadillac Tax” as authorized by the Affordable Care Act

will become law January 1, 2018. The Cadillac Tax is a 40% excise tax that will be collected from districts

on the value of family and single health care plans that exceed the targets of $10,200 for single plans and

$27,500 for family plans beginning January 1, 2018. The Cadillac Tax will not consider the value of

dental, vision and life insurance plans as part of the target values. What does count towards the thresholds

is any amount paid by employer, employee and any health savings or health reimbursement account

payments. Other assumptions in the following tables and figures are noted below:

After January 1, 2018, the thresholds will be adjusted for inflation (normal consumer price index

`CPI) +1% in 2019. Then from 2020 and beyond the thresholds will index to CPI only. The

concern is that medical trend grows at double and more of regular CPI. This will eventually

assure all districts and employers in the United States will at some point pay the 40% excise tax.

It is critical for districts to be looking long term now to help avoid the 40% tax if at all possible.

Table 2 assumes a medical trend factor of 7% growth per year beginning in 2014. Each district’s

actual trend may be higher or lower. The annual medical premiums in 2013 are actual premiums in

effect now for each of the districts. The “Model District” represents a district medical and

prescription drug annual cost in 2013 that when inflated by the 7% annual cost assumption would

reach $27,500 in 2018. This represents a point of reference for any district whose premium in

2013 is currently in excess of this benchmark. In other words, if a districts premium is higher than

the “Model District “level in 2013 they are in serious jeopardy of hitting the Cadillac Tax

threshold in 2018.

Table 3 shows the same data only for single medical and prescription drug coverage and uses the

Cadillac Tax threshold of $10,200 in 2018.


14

Any district whose 2013 annual family premium below in Table 2 is higher than the “Model

District” annual premium is in jeopardy of hitting the Cadillac Tax Threshold in 2018.

Table 2: Affordable Care Act Cadillac Tax Projector For Family Insurance Premiums

CPI Trend Est. 7.00%

Annualized Family Medical & Drug Premium ELCSD Insurance Survey October 2013

Cadillac Tax Projector 2013 to Est. 2022 - Current Family Medical Premiums

District Actual 2013 E14 E15 E16 E17 E18 E19 E20 E21 E22

Martins Ferry $24,492 $26,206 $28,041 $30,004 $32,104 $34,351 $36,756 $39,329 $42,082 $45,028

Steubenville $21,900 $23,433 $25,073 $26,828 $28,706 $30,716 $32,866 $35,167 $37,628 $40,262

Harrison Hill $21,828 $23,356 $24,991 $26,740 $28,612 $30,615 $32,758 $35,051 $37,505 $40,130

Cambridge $21,444 $22,945 $24,551 $26,270 $28,109 $30,076 $32,182 $34,434 $36,845 $39,424

East Liverpool $20,748 $22,200 $23,754 $25,417 $27,196 $29,100 $31,137 $33,317 $35,649 $38,144

Model District $19,607 $20,979 $22,448 $24,019 $25,701 $27,500 $29,425 $31,485 $33,688 $36,047

Salem $17,940 $19,196 $20,540 $21,977 $23,516 $25,162 $26,923 $28,808 $30,824 $32,982

St. Clairsville $16,956 $18,143 $19,413 $20,772 $22,226 $23,782 $25,446 $27,228 $29,134 $31,173

State Avg. $16,500 $17,655 $18,891 $20,213 $21,628 $23,142 $24,762 $26,495 $28,350 $30,335

Beaver $14,664 $15,690 $16,789 $17,964 $19,222 $20,567 $22,007 $23,547 $25,195 $26,959

CPI Est. 4% Post 2018 $27,500 $28,600 $29,744 $30,934 $32,171

*Source: Affordable Care Act Website and Current 2013 Premiums from Insurance Survey Responses from

each district

It is predicted below in Figure 15 that based on current 2013 family medical insurance rates and a

7% medical trend that East Liverpool, Harrison Hills, Steubenville, Salem, Martins Ferry and

Cambridge will all hit the Cadillac Tax threshold in 2018.

By2022 it is predicted that only St.Clairsville and Beaver may not be affected by the Cadillac Tax.

Figure 15: Projection of Family Insurance Premiums at 7% Trend to 2018 Cadillac Tax Point $27,500

$12,000

$14,500

$17,000

$19,500

$22,000

$24,500

$27,000

$29,500

$32,000

$34,500

$37,000

$39,500

$42,000

Actual 2013 E14 E15 E16 E17 E18 E19 E20 E21 E22

An

nu

al P

rem

ium

Cadillac Tax Projector 2013 to Est. 2022 - Current Family Medical Premiums

Steubenville

Harrison Hill

Cambridge

East Liverpool

Model District

Salem

St. Clairsville

State Avg.

Beaver

CPI Est. 4%Post 2018

= $27,500 ACA Cadillac Tax Point 2018


each district


15

Any district whose 2013 annual single premium below in Table 3 is higher than the “Model

District” annual premium is in jeopardy of hitting the Cadillac Tax Threshold in 2018.

All but Beaver local is projected to be affected by the Cadillac Tax by 2022.

Table 3: Affordable Care Act Cadillac Tax Projector For Single Insurance Premiums

CPI Trend Est. 7.00%

Annualized Single Medical & Drug Premium ELCSD Insurance SurveyOctober 2013

Cadillac Tax Projector 2013 to Est. 2022 - Current Single Medical Premiums

District Actual 2013 E14 E15 E16 E17 E18 E19 E20 E21 E22

Harrison Hill $9,852 $10,542 $11,280 $12,069 $12,914 $13,818 $14,785 $15,820 $16,928 $18,113

Martins Ferry $9,792 $10,477 $11,211 $11,996 $12,835 $13,734 $14,695 $15,724 $16,824 $18,002

Steubenville $9,408 $10,067 $10,771 $11,525 $12,332 $13,195 $14,119 $15,107 $16,165 $17,296

Cambridge $9,336 $9,990 $10,689 $11,437 $12,238 $13,094 $14,011 $14,992 $16,041 $17,164

East Liverpool $9,096 $9,733 $10,414 $11,143 $11,923 $12,758 $13,651 $14,606 $15,629 $16,723

Salem $7,392 $7,909 $8,463 $9,056 $9,689 $10,368 $11,093 $11,870 $12,701 $13,590

Model District $7,273 $7,782 $8,326 $8,909 $9,533 $10,200 $10,914 $11,678 $12,496 $13,370

St. Clairsville $7,200 $7,704 $8,243 $8,820 $9,438 $10,098 $10,805 $11,562 $12,371 $13,237

State Avg. $6,468 $6,921 $7,405 $7,924 $8,478 $9,072 $9,707 $10,386 $11,113 $11,891

Beaver $6,324 $6,767 $7,240 $7,747 $8,289 $8,870 $9,491 $10,155 $10,866 $11,626

CPI Est. 4% Post 2018 $10,200 $10,608 $11,032 $11,474 $11,933


each district

It is predicted below in Figure 16 that based on current 2013 single medical insurance rates and a

7% medical trend that East Liverpool, Harrison Hills, Steubenville, Martins Ferry, Salem, St.

Clairsville and Cambridge will all hit the Cadillac Tax threshold in 2018.

By2022 it is predicted that only Beaver Local may not be affected by the Cadillac Tax.

Figure 16: Projection of Single Insurance Premiums at 7% Trend to 2018 Cadillac Tax Point $10,200

$5,000

$6,500

$8,000

$9,500

$11,000

$12,500

$14,000

$15,500

$17,000

$18,500

$20,000

Actual 2013 E14 E15 E16 E17 E18 E19 E20 E21 E22

Ann

ual P

rem

ium

Cadillac Tax Projector 2013 to Est. 2022 - Current Single Medical Premiums

Harrison Hill

Martins Ferry

Steubenville

Cambridge

East Liverpool

Salem

Model District

St. Clairsville

State Avg.

Beaver

CPI Est. 4% Post2018

= $10,200 ACA Cadillac Tax Point 2018


each district


16

Schedule of Medical Benefits

Table 4 on the following page shows a condensed summary of the Schedule of Benefits for each

of the districts that supplied this information. There are many more items included in a full

schedule of benefits but generally speaking the amount of money that is charged for deductibles,

co-insurance, maximum out-of-pockets limits for In-network and Out-of-Network are key drivers

of health care plan dollars.

At the bottom of Table 4 the annual health insurance premiums for each district is noted as is the

percentage of annual premiums plus (+) or (-) the state wide average for all school districts which

is used as a benchmark for performance for the comparison districts.

Table 4 shows that the districts with the highest Out-of-Pocket maximums for both In-Network

and Out-of -Network also have the lowest annual premiums compared to the Statewide

Benchmark. Higher deductibles and coinsurance limits are generally known to lower insurance

premium costs overall.

Conversely, the districts with the lowest Out-of-Pocket generally have the highest annual

insurance cost.

East Liverpool has one of the lower Out-of-Pocket maximums of the peer group districts

compared. Increasing deductibles and adjusting In-Network Out-of-Pocket maximums to $1,000

single and $2,000 family and Out-of-Network to $2,000/$4,000 would likely lower costs for East

Liverpool.


17

Table 4: Schedule of Medical Benefits East Liverpool Insurance Survey

Medical Insurance Benefits - Schedule of Benefits 2013

Major C

omponents

of Medica

l Cost

s

East

Liverp

ool

Beaver

Cambrid

ge

Harriso

n Hills

Steubenvil

leSa

lem

- PPO P

lanSt

. Clairs

ville

- PPO

Marti

ns Fry

.

* Dat

a Not P

rovid

edSt

ate A

vg.

In-Network

Single Coverage

$0 Deductible 11.20%

$1 to $100 Deductible $100 $100 25.20%

$125-400 Deductible $150 $300 $175 $200 27.90%

$500 - $1,199 Deductible $500 19.80%

$1,200 or more Deductible 15.90%

Family Coverage


$1 to $200 Deductible $200 $200 16.90%

$200-800 Deductible $300 $600 $350 $400 27.20%

$801- $2,399 Deductible $1,000 20.90%


Out-Of-Network Single Coverage


$1 to $100 Deductible 25.20%

$125-400 Deductible $150 $175 $200 $200 $200 27.90%

$500 - $1,199 Deductible $600 $1,000 19.80%


Family Coverage


$1 to $200 Deductible 16.90%

$200-800 Deductible $300 $350 $400 $400 $400 27.20%

$801- $2,399 Deductible $1,200 $2,000 20.90%


Co-InsuranceIn-Network

Plan Pays 100% 100.00% 100.00% 26.10%

Plan Pays 90 - 99% 90.00% 90.00% 90.00% 90.00% 41.10%

Plan Pays 80 - 89% 80.00% 30.40%

Plan Pay 80% < 2.40%

Out-of-Network Plan Pays 90 -100% 90.00% 1.40%

Plan Pays 80 - 89% 80.00% 80.00% 33.50%

Plan Pays 70 - 79% 70.00% 70.00% 70.00% 70.00% 32.50%

Plan Pays 60 - 69% 27.60%

Plan Pay 60% < 5.00%

Out-of-Pocket Max In-

Network

Single Coverage Max $550 $800 $300 $250 $1,000 $500 $500 $1,000 Median

Family Coverage Max $700 $1,600 $600 $500 $2,000 $1,000 $1,000 $2,000 Median

Out-of-Pocket Max Out-

of-Network

Single Coverage Max $1,050 $1,600 $400 $750 $2,500 $1,000 $1,000 $2,000 Median

Family Coverage Max $1,200 $3,200 $800 $1,500 $5,000 $2,000 $2,000 $4,000 Median

Single Annual Premium $9,096 $6,324 $9,336 $9,852 $9,408 $7,392 $7,200 $9,792 $6,468

Family Annual Premium $20,748 $14,664 $21,444 $21,828 $21,900 $17,940 $16,956 $24,492 $16,500

Single Annual Premium 40.63% -2.23% 44.34% 52.32% 45.45% 14.29% 11.32% 51.39% $6,468

Family Annual Premium 25.75% -11.13% 29.96% 32.29% 32.73% 8.73% 2.76% 48.44% $16,500

Current 2013 Annual Premium Cost

% Higher (+)/Lower (-) Than State Average Costs -2013


elcsd insurance survey report 2013

Documents

cost of health insurance

selected peer group

health insurance survey

district state group

percentage of wages

comparison of family

percentage points higher

schedule of medical