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Better Healthcare Options for K-12 Schools

We can all agree that being a teacher is one of the most important jobs of all. This means that as a school administrator, taking care of your staff and faculty is one of your top priorities. Health benefits for teachers are paramount if you want to ensure they consistently feel like you’re providing high quality benefits. But with the Bureau of Labor Statistics reporting that the cost of benefits is now taking up 29.6% of total compensation, it often feels like much more can’t be done.

Does taking better care of your team actually require more resources? 

Or, is there a way to regain and repurpose certain expenses in your budget from one line item to another? In even simpler terms, is there anywhere you can spend better to get more money to put toward somewhere else? With health benefits for teachers, the only way to make a noticeable difference is rethinking how it’s always been done.  

Group plan costs have increased by 283.7% in two decades, which is 3X faster than the increases in employee pay. How are you going to give good benefits to employees if you can hardly keep up with the current rate of expense growth already?

1. Managed Individual plans for K-12 teachers.

When we’re talking about better health care options for K-12 schools, we have to start with options. Oftentimes, employers shop with an insurance carrier, find their best option, and put all resources into one plan. And this plan is somehow supposed to fit every health situation in the organization. But offering an outdated group plan is just as unsatisfying as it would be if an employer was still offering an outdated version of pension plans.

The reality is that one size never fits all, especially when it comes to health benefits. Better healthcare options for schools start with moving away from offering one group plan and into managed individual health benefits.  

The basic concept of this method is simple. Instead of putting money into one plan, give teachers a plan that fits their needs. The good news is that individual plans are actually cheaper, so you spend less but give a more satisfying benefit.

Here are some of the most popular options chosen by K-12 staff and faculty:

  • HSA option for individuals who do not use healthcare often throughout the year, and want to ensure they are planning for the future and saving money now for when they actually need it later.
  • Faith-based option for individuals who want a health benefit that directly aligns with their beliefs, along with the support of a like-minded community of fellow believers.
  • Spousal option for individuals who have a spouse’s plan they can join, so their family has just one deductible. 

There are more personalized options than just these, but I thought I’d highlight the broad-stroke directions we’ve seen in all of our years of experience. The big concept that has been quickly growing in popularity over the last 10 years—just like 401(k) plans exploded thirty years ago—is people wanting to find a plan that matches their own needs, not one that’s lumped together with the whole group. This is the first step to giving better health benefits for teachers.

2. Cheap healthcare options for schools are best.

As leaders, we’re always looking at how we can spend the least but get the most. It’s good business and it keeps the mission moving forward. But in the back of our minds, aren’t we always worried that by cutting costs, we are inevitably cutting coverage, too? And if our goal is to give good benefits to K-12 employees, making the benefits worse by lowering expenses would defeat the entire purpose of finding better healthcare options for your school.

What if you actually could find something similar at a dramatically lower cost? What if you could even—pie in the sky, of course—find something newer, better, and cheaper for your team? After all, things have been bad with health benefits for almost three decades now, and surely over the past 10 years or so, something has been developed to start solving this big problem, right?

Managed individual health benefits unlock a key feature for your budget that group plans miss out on—Advanced Premium Tax Credits. These function as an automatic discount on the monthly cost of the insurance product. It’s really similar to the Child Tax Credit (if you have a kid, you get the tax credit). The only difference is that this tax credit can only go toward individual insurance plans, not traditional group plans.

The big deal about these tax credits is that they are big discounts!

According to our 2022 proprietary Remodel Health data, the median discount on individual insurance is 68.5%. Yes, you read that correctly. Amongst all people who are using an individual plan, there is an average savings of $562 per month—or $6,744 per year! And that is on top of the fact that individual plans are already cheaper than those outdated, overpriced group plans. This further means that if you are paying full price for those old group plans, you are leaving money on the table and spending resources you don’t need to spend anymore.

3. Give better benefits using medical dollars.

We’ve saved the best for last. It’s not just about how to give good benefits to K-12 employees, but about giving better—and better is lowering out-of-pocket costs for employees. How can we make this happen? Through medical dollars. Specifically, using a Health Savings Account (HSA). This means going beyond helping your employees with just the cost of the premium, but also helping them to have the medical dollars they need for their medical bills. The need for these medical dollars is more important now than it ever has been.

From 1999 to 2021, deductibles increased by 4X. The deductible is the portion paid before insurance starts kicking in. Even worse than that, as of today, the average max out-of-pocket for a family is $8,078. The legal limit, however, is $17,400 and growing each year. 

This is why better benefits mean less out-of-pocket expenses.

Each year, 17% of Americans will experience a visit to the emergency room. Another way of looking at this is how the CDC reports it, that each year there are currently 130 million ER visits, 16.2 million of those resulting in a hospital stay. The U.S. Department of Health and Human Services reports that costs for emergency care can have a variable range of more than $17,000~.   

This means that when you have a visit to the ER, it is statistically likely that you will not only reach your deductible, but you will also hit your max out-of-pocket. Therefore, we need to understand that in terms of health benefits for teachers, in their worst year, your teachers will need to have at least $8k in cash lined up and ready to pay out on those medical bills—yes, even with insurance. And if they don’t have it, like so many other Americans they will simply have to go into medical debt.

There is no better first step for an administrator than to simply learn more!

I know I’ve given a lot of information in just a few short paragraphs. My goal in writing this was not to convince you of anything right now, but to simply get the conversation going and hope that you engage with these positive changes in healthcare options for schools. We know that every administrator wants to give good benefits to their K-12 employees, and we especially want to find better health benefits for teachers. 

Your next step is to visit remodelhealth.com/webinar and register for our next free educational webinar. I’ll walk you through more of the points you need to know about all of these changes that have occurred over the last 10 years, and give you some actionable steps to take to get your questions answered in your context. Learning is power for healthy change, and we’re ready to help you grow!

Important Notice:  Remodel Health does not intend to provide specific insurance, legal, or tax advice. Remodel Health always recommends consulting with your own professional representation to properly evaluate the information presented and its appropriate application to your particular situation.