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Tosa schools look to save with new insurance administrator

Switch to United could save $500,000 as plan remains the same

Aug. 28, 2012

The Wauwatosa Public School District could save $500,000 in health coverage costs by contracting with a new insurance administrator, a consultant said this week.

Last year, insurance coverage for district employees came to about $12.6 million in the district's self-funded plan as administered by Humana, said Michael Neuberger, senior vice president of Hays Companies of Wisconsin, a benefits consulting group.

In a Monday night presentation to the School Board, Neuberger said the same coverage, "based on historical claim utilization," would drop to $12.1 million under the plan as administered by United Healthcare.

The board approved the switch from Humana to United in a unanimous vote. The term of the agreement is one year.

The district has used Humana as its provider since 2005, when it dropped WPS.

The cost difference arises mostly from better discounts negotiated with providers by United than by Humana, Neuberger said. A smaller portion of the savings - less than $5,000 - is due to the lower administrative costs charged by United. Humana's fee would be $342,195; United would charge $336,585.

Neuberger's analysis also showed that United's 98.67 percent match with currently used providers was a better fit than the 95.1 percent usage of in-network providers under Humana. Under last year's plan, there were $455,299 in out-of-network claim costs. Under the United plan, that figure would drop to $122,943.

United "can administer the current benefit plan with no exceptions," according to the consultant's comparison summary. The plan would be taken over by United on Oct. 1. The summary also says that, if the school district renews its contract with United in a year, the current list of preventive drugs would switch to United's preventive list beginning in October 2013.

Daniel Chanen, the district's director of human resources, said the change in insurance administrator was an administrative decision that had not been discussed with employees.

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