School Business Affairs July-August 2019

18 JULY/AUGUST 2019 | SCHOOL BUSINESS AFFAIRS Another way to protect the individual and to promote greater participation in the Value HSA is to deposit between 50% and 75% of the district’s HSA contribu- tion on January 1, so employees have funds to cover their prescription costs before they have satisfied their annual deductible. This approach demonstrates a com- mitment to employees’ financial well-being and to the HSA offering. The Value HSA program is one key element of an effective benefit strategy that allows the district to stabi- lize its healthcare budget and to provide quality, sustain- able benefits. A successful rollout of the Value HSA has three key elements: engage, educate, and protect. Potential Budget Impact If the district already has an HSA but is not realizing the potential budget benefit, the district should consider the following steps: 1. Review the plan design. 2. Consider a higher employer contribution. 3. Review the communication plan; even the name of the plan can change the conversation. “Value HSA Plan” and “High-Deductible Health Plan” have dif- ferent implications. 4. Expand the communication plan. Districts should ask how they are educating the employees, when they are communicating, and who is communicating the message. Since 2010, the most predictable element in healthcare has been the increasing profits of insurance companies, prescription medicine manufacturers, and healthcare systems. Education leaders already know the importance of teamwork when engaging in fundraising, curriculum design, and student achievement. They can use the same strategy when designing employee benefit offerings by engaging the board of education, administration, and employees in thinking differently and working together to engage, educate, and protect employees and to stabi- lize the budget. Michael Baker is president of Group Alternatives, Downers Grove, Illinois. Email: High-Deductible Health Plan (HDHP): A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but users pay more healthcare costs out of pocket before the insurance company begins to pay its share. An HDHP can be combined with a health savings account (HSA), allowing subscribers to pay for certain medical expenses with tax-free money. The IRS defines a high-deductible health plan as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family. Health Savings Account (HSA): An individual savings account established by a participant in a qualified high-deductible health plan (HDHP). An HSA provides extra tax advantages for those savings: tax-free contributions, earnings, and withdrawals used to pay for qualified medical expenses. Health Reimbursement Arrangement (HRA): An IRS-sanctioned program funded entirely by an employer to reimburse qualified medical expenses for participating employees and their spouses and children. An HRA is typically offered in con- junction with a high-deductible health plan or for retirees. The employer may choose the amount to make available, how the funds can be used, whether unused funds can be rolled over from year to year, and whether funds will be available after termination of employment. Preferred Provider Organization (PPO): A medical care arrangement in which a health plan contracts with medical providers to create a network of participating providers who agree to provide healthcare to subscribers at reduced rates. HEALTHCARE GLOSSARY