001Good evening. The February Germantown Board of Education work session is called to order. The first item on the agenda is going to be discussion of insurance changes and historical adjustments. >> We're going to get started. >> Mr. Manuel, >> we we will get started and I think there's a presentation to go along with Miss Strat. >> I'll turn it over to you. >> Okay, great. Um, good evening everyone. Before we actually get started, I did want to introduce to you um a special guest that we have in the audience today. This is Britney Spradling. uh she is with employee employee security planning and Miss Bradling is GMSD's medical plan consultant and so she's here tonight if you have any questions um about the medical plan as well. All right. Okay. Great. All right. Um >>
002one more question. Will this be >> Mr. Ellis is still down in Orlando. So will he have access to watch this presentation at some point? because I know I don't think this comes across on the broadcast. >> Yeah. And we can also share that we will share the slides with them also. >> Okay. Perfect. Thank you. >> Okay. So, I thought it would be beneficial for those folks at home who may be watching the meeting to provide a quick summary of our health insurance budget and GMSD is self-funded which means the district is responsible for managing and paying for health related expenses offered to our employees and our retirees. GMSD has allocated over $8 million towards the health insurance budget and I believe it's our second largest budget behind the personnel budget. On the revenue
003side, GMSD receives funding from employee and employer contributions, pharmacy rebates, and additional GMSD funds through our reserves if needed. On the expenditured side, >> go back. >> Yep. There you go. The health insurance plan pays for medical and pharmacy claims, stop-loss premiums, the GMSD health and wellness center, and administrative services. And those administrated services that includes Lucent Health which is our third-party medical plan administrator, Weldine which is our third pharmacy benefits manager, concern which is our employee assistance program, Telamemed which is our TEDoc services and employee security planning which is our benefits consultant. >> So I do want to just point out that when you look at this budget, three of those are fixed costs. There are things that we have contracts for. we know that we are paying those things. We've gone out to
004bid for stop-loss for example. We know that we're going to pay that amount of money. The other amount, the 6.2 million the medical claims incurred is just a projection. It's a budget amount. And so what we have seen over the past several years is that medical claims have dramatically increased. And that's not a realistic number of of what we are seeing to date even though it is uh something that we have budgeted for. >> Mr. Would you mind going back one slide? I would didn't read fast enough. >> So this is the reserve slide >> revenue >> or revenue sorry excuse us sorry the revenue side and so we get revenue from employee and employer contributions those are premiums. Um we also get pharmacy rebates through weld. Typically we get those each quarter and then
005additional GMSD funds through reserves if we need them. >> Great. Thank you. >> So, we also have a budget that is dedicated to our retirees who are eligible for postretirement medical benefits. And this is called our OPED or other postmployment benefits budget. And the revenues for our OPED budget include employer and retirey contributions and investment gains. And so one of the things that you know that we've done in the past was we decided as a board that we were going to fully fund our ARC for this or annual required contribution although there's another acronym for too I think but um we have uh we go to an actuary who determines what's the amount uh I think in 2017 uh we essentially closed the door so new hires at that point were not going to be
006provided the same uh level of benefit benefits because u and we have tiers of of support for this. So we should see that money go down every single year but we were funding it fully from from the start. So uh that is our oped account and that is a separate account that has its own um reserve. It has its own balance because that has to be a pot that we we are preparing and we are funding for the future. And this expenditure side, it just talks about um our retirey medical claims, stipens, administrative expenses, and the premiums that is paid out. Okay. All right. So, GMSD has offered health insurance options to our employees since we became a district in 2014. And from 2014 to 2023, we experienced a long period of stability with the
007plan. During this time, we only had to make small tweaks with the plan, and we were able to keep premium rates stable. Uh the deductibles and out-of- pocket maximums were low and consistent for our employees, and we did see an increase in enrollment every year. In 2022, we added the GMSD Health and Wellness Center, which is a health clinic that our employees, their dependents, and our retirees can access for preventative and acute care. And the clinic is currently open three days a week and has been a high value benefit for our employees. Um, our claims were averaging around three to four million each year. And we'd had, I guess, what we call our first kind of bad year in 2020 when we hit around the 5 million in claims. >> Have a question real quick.
008Are our retirees eligible to use the health clinic? >> They are. Yes. >> I guess, you know, when I've been thinking about, you know, when we've talked over the years about our health care, you know, cost challenges. I've really never considered the retirees. I've just kind of considered them a separate bucket. Um, so but so OPED though is really covering everything there. >> Yes. and it reimburses the health insurance account. >> And know too that when we talk about retirees, um they're not all made the same. Age is really important when we talk about retirees and when they become Medicare uh eligible because Medicare becomes their primary and our plan becomes their their secondary. Um so it's really those people who retire before their Medicare eligible that that are our highest I guess expenses in
009our oped account. Um, when it comes to the health and wellness center, do we have any uh projections on how much we've saved uh by having that versus, you know, having to pay to a primary care physician or anything? >> So, I don't have a specific number for you right now. And um what Britney always says is it typically takes about five years uh of having a clinic open and the employees consistently using it before you really start to see some significant savings. So, um hopefully here in the next couple years we'll we'll have uh some information with that. Now, as far as like savings to the plan, but um if you talk to our employees, I think the number one benefit that they will tell you of working for GMSD on our health insurance
010plan is utilizing the clinic. We have lots of employees that do regularly utilize a clinic and they just sing the clinic's praises. Well, and I guess to that point, um, like if if our employees are going there rather than going to, you know, Baptist Minor Med, the cost because there's obviously a cost for that. So, I would assume I would assume in that regard is probably paying for itself. I think that was always the expectation >> and I think we've talked about this too. The goal here to the way you save in healthcare and I think it was was it Bob who used to tell this may be his quote so I may quote it wrong but it was the way to save in health insurance is for people to be healthier and so for
011you to save you've got to encourage people to regularly go to the doctor to help with those chronic illnesses to to make sure they're taking their medications they're staying healthy and that's that biggest goal with that health clim make it easy so that they're going um and they're getting their medications and they're taking care of their bodies. So that's the goal. >> There may be savings on the back end, too. >> All right. This chart just shows you the small tweaks that we've made to our three medical plans from 2014 to 2024. Um you can see the increases in co-pays, out-of- pocket maximums, and pharmacy co-pays. Uh we had no changes in premium rates during this time period due to us being able to manage the plan based on what we were budgeting. So, can
012you leave it on that slide? Can you just explain for us real quick the three columns that you see in each of those years what what those are just in case people don't What am I looking at? There's a lot of them. >> So, GMSD has three medical plans. Um we have an HR plan which is our lowest tier plan. We have um a basic plan which is kind of our middle-of the road plan. And then we have what's called our Cadillac plan which is our in network plan. And so employees in GMSD have the option to enroll in one of those three plans every year. Um, and each plan is a little different based upon the annual deductible, the the physician's care, the uh specialist visits, the out-of- pocket maximums. And so the chart
013just illustrates what those details are for each one of those plans and then the changes that we have made over the the past 10 years. Do we have rough numbers of participation in each of the plans? >> Uh, we do. I have total numbers for you in a slide. I I don't have the actual numbers in each plan today for you, but I can get those for you. >> Yeah. I just didn't know like how many were opting for like the HA versus, you know, the Cadillac plan. >> The majority of our employees are on the in network plus plan, which is our Cadillac plan. >> Okay. Right. So from 2023 to 2026, we have noticed a significant shift with the plan. Uh the majority of our 700 employees utilize our health plans. Uh at
014last count, we have over 520 employees, 26 retirees, plus their dependents and spouses that make up a total of 1,157 individuals. We call those belly buttons that are covered by by our plan. Um, our claims rose to $7 million per year and we saw a significant increase in pharmacy claims. The increase in claims cost is consistent with national trends that other businesses have seen across the nation. So, this is not just a GMSD challenge and Mrs. Sprradling, she can explain some of that the national landscape if you are interested about that. Um due to the high claims cost, we have been intentional with making some significant design plan changes. Okay. And this chart here just illustrates our last two years of medical and pharmacy claims that our plan has our plan has paid out. And
015you can see the shift of the increase in pharmacy claims which are now becoming almost 50% of the total claims that are being paid out by the plan. And I think that that's the biggest challenge that we're seeing. So now every time I see one of those drug commercials on TV, when I'm watching sporting events, whatever I'm watching on TV, uh I'm thinking, "Dad gum it, they're trying to sell us the most expensive drugs that they're going to hurt hurt our plans." Um but know that that is really significant the fact that we're seeing those increase in claims in pharmacy. That's where we're seeing the a lot of the challenges that we're facing. Do we cover uh GLP1s for our our employees? >> We do, but not for weight loss. >> Okay. >> So, it's
016for for uh a diabetes condition. Um some other conditions, too. But they have to go through a series of steps. Um they have to try other medications before they're able to to have the GLP ones. >> So, a question on that. Um since weight loss is a weight is a huge predictor of other uh comorbidities uh either present now or to come. Uh what is the the motivation about not covering it for weight loss? >> Well, I think from GMSD's perspective, it is a very expensive drug, extremely expensive. Um, and so as a cost-saving measure to the the pharmacy plan, um, that's why we have not opened it up for anyone that wants to be on it for weight loss. >> Gotcha. >> All right. So, looking at this slide, and I guess I hadn't
017seen it broken down this way. You would think things are trending in, you know, a positive direction. Obviously, we had a 1.1 million reduction in medical claims. The pharmacy claims went up, but overall lower. Where where are we trending this year for this? Okay. >> Yeah, we got we got a slide because I'm looking at this saying, "Okay, >> hold on. You're falling right there." >> All right. Because I'm I'm thinking things look all right here. >> Well, not all right, but better better than I was thinking. >> Okay. Uh so, we do know that we need to make some pretty significant uh long and short-term changes to our medical plan if we want to sustain this benefit for our employees. So for the 2526 school year, GMSD increased employee health premiums by 5%. And
018we also increased the out-of- pocket maximums and pharmacy co-pays for all three of our plans. Okay. In addition, uh to help control the pharmacy costs, this year GMSD has transitioned from an open formulary to a clinical outcomes formulary. And we have also put into place a bioimilar requirement for qualifying specialty drugs. And I believe that we have shared in our monthly benefits brief one example of a specialty drug. Uh it's called Stellar, which the plan was paying out $25,800 per prescription, but we now have a bio similar option for Stellara, and it only costs the plan $3,800, which has a significant savings. And while these pharmacy changes have just taken effect this year, we are already seeing a positive impact. We are experiencing an almost 12% decrease in per member per month pharmacy costs based
019upon this time last year. And for our specialty drugs, there is almost a 14% decrease in cost and an almost 9% decrease in brandame drugs from this period last year. And so this is encouraging news for the plan. Okay. So, as we think about the future of benefits in GMSD, we do have some options that we would like for the board to consider. Uh, we have the option to join the state of Tennessee health insurance plan. We can explore a new pharmacy and medical plan providers and or we could continue with our same plans to include increased costs associated with the budget. And I'll provide some additional information on each one of these options for y'all's consideration. So this fall, GMSD met with a representative from the state of Tennessee to gather information on the
020state health insurance plan and we learned a lot of things. Uh some of our top takeaways include GMSD is able to determine the employee employer portion of the premium rates per year, but the state is the one that has the control on determining the premium rate increase. And over the past three years, they've consistently raised premium rates by 5% annually. >> Yes. But so when we talk about benefits, nothing is stopping the increases that we see in health insurance costs. That's nothing that we are going to do is going to stop those increases. The benefit of the state health insurance plan, and that is not my recommendation to do that, but the benefit of the state health insurance plan is that it is easier to budget. They're going to tell you, here's how much you
021have to pay per employee to be on um this plan. Uh each year it's a requirement for the state of Tennessee that we have to submit all of our plan documents and our plan has to be at least uh equivalent, if not better, than that plan, that state health insurance plan. Um, we've spoken with other districts that have made the switch and other districts that are on the plan. Um, and there are some other challenges associated with the plan, but one of the benefits is for budgeting purposes, it's easy, but that is not going to stop it from increasing every year what we're spending on health insurance. >> I guess the only thing I guess, and I understand that's not your recommendation, I guess with the state plan, you're you're taking the risk off of
022us and putting it onto them. Correct. >> Yes. Mhm. They would be paying for the claims. >> Yeah. Okay. So, that's, you know, if if we're looking at the options because I think that's where we've gotten, you know, I would say into some challenges, but I think, you know, the claims and obviously that's why we have the stop-loss. But, you know, we're assuming that risk where I would assume if if it were on the state plan, we wouldn't even need the stop loss because it would be >> right. >> It's all their their risk. >> Yep. Okay. So, so just so everybody knows, we we are not completely exposed when we talk about our health insurance plan. We we've talked about the fact that we have insurance on our health insurance. So, there is a
023cap. There is an individual cap, but there's also an aggregate cap. So, our exposure is limited as far as how high these claims could go. So, if we had lots of people having really significant events, uh we would have a maximum exposure that we have. Um and I think it's approximately 9 million. I don't know the exact number, but it's around 9 million, I think. Uh and our aggregate right now because we don't have any lasers, not aggregate, excuse me, the individual right now is about 125. >> Yeah, $125,000 per person. And once the district has paid that amount, so if someone has a serious incident, we start getting reimbursed. Uh we have to pay for that up front, but we get reimbursed for those uh claims for those individuals. So when it's not completely
024exposed, but there are some other bigger challenges with the with the state plan because you are giving away um control. >> Uh there are multiple health insurance plan options for employees to consider on the state plan. Uh however, the majority of the plans have higher deductibles and out-of- pocket maximums as compared to the GMSD health insurance plans. Um, also the state plan requires members to pay 30% of the cost of a specialty drug and they have separate out-of- pocket max maximums for specialty meds which would place a higher burden for medical expenses on our employees than what they have are previously used to. Um, and also the state plan has an extra fee to access broader networks. So if an employee wants to stay with a trusted doctor, they may have to pay extra in
025order to continue to utilize that doctor's services. So an interesting fact that we learned during our meeting with the state is that before moving forward with the state health insurance plan, all full-time eligible GMSD employees and retirees must vote on joining the state health insurance plan. and at least 50% of our eligible employees and retirees must vote yes to proceed. And if that threshold is met, then the GMSD school board would vote to enter into anou with the state. So, um you know, uh that is something that our employees would have to to consider our current health insurance plans that we have or moving to the state. >> And I think we've talked about this too. Um it's easier to get in than it is to get out of this plan. So if we got
026into the plan and we were part of it and our employees were unhappy and we were unhappy, you have to have another vote. But I think it has a much higher threshold uh that you have to get everybody to vote to leave that plan. So um that's another difficult challenge with this. >> They want you to stay once they they get you. >> Yeah. So uh another challenge with Could you go? Yeah. Another Sorry, you're good. Another challenge um with the state plan has to do with our retirees. Uh those who retire before retired before July 1st, 2015, they could transition to the state plan until age 65. But this conflicts with GMSD's current retiree benefits, which has an eligibility enrollment of July 1st, 2017. So this means that we have two cohorts of GMSD
027retirees who would no longer be eligible for post-retirement benefits through the state health insurance plan. So the district would need to make a decision on whether or not to provide some sort of medical benefit for these retirees. Uh and then finally the the state does not offer a clinic for folks to utilize if they were on the plan. Okay. So, those were the pros and cons for uh it looking at the state of Tennessee health insurance plan. So, now we're going to move to um looking at new pharmacy benefits managers and benefits administrators. So, another option that we can explore to find savings for the plan. >> Hold up. Before we move on to that, can you tell us what we're currently doing for our pharmacy benefits? Just to remind everybody in our board who's
028the company with with and what do they do? >> Sure. So, we currently partner with a pharmacy benefits manager called Weldine, and they manage all of our pharmacy claims for us. So, they make sure that the um prescriptions that our employees are utilizing are appropriate. Um they uh make sure that the doctors and the employees go through the various step programs before uh the prescriptions are filled. and they work with Lucent Health with it which is our third-party administrator um to make sure that the claims are paid in a timely manner. >> And currently we're under contract with >> Yes. So we're under contract with Well done. We are in year two of three for our contract with Well done. And and when our contract is up, we typically go out to um an RFP
029to see all of the different options of benefit pharmacy benefits managers that we can utilize. So when when we talk about what are our challenges that we're facing right now um one increased costs that that's just a challenge that we're we're facing with our health insurance but the other is I think more focused around what are we doing around our budgeting and what is our prediction of of what we're doing. Um when you saw the earlier slides that talk about the costs increase that we're seeing the fact that a lot of those were due to pharmacy costs is the reason that we are considering hey we should look at doing something different with with our pharmacy. Um so this is just an exploration that we had. Um so that's why she's talking about what what
030else could we do besides using well done. That's the that's what this section of the slide and one of the things that the board should consider here. Yep. Um, so we have had some preliminary discussions with another pharmacy benefits manager. It's called MedBen RX. It this is the same pharmacy benefits manager that the other municipalities use. Um, they have suggested that they can find around $500,000 of savings based upon our current pharmacy utilization. Now, that is just a rough estimate. Um we you know we would love to maybe go back go out to RFP and see what total options there might be out there for for us. Um so you know we also just like Mr. Manuel was saying we were we are in year of two of three for well done. Um which means
031that if you the board would like for us to explore going out to RFP now we you would need to break that contract. Um, so you'd have to provide a 180day notice to Weldine requesting to be released from that contract. Otherwise, we are already on schedule to go out to RFP for these services for the um, next school year. So, next year we will be going out to RFP anyway. >> Besides the notice, are there any penalties uh, financial penalties? >> No. >> Okay. Um, and I do think we there has to be some discussion about what we're seeing. Um, the difference between the MedBIN RX versus the Weldon. Um, there is a difference in how those operate. Isn't that correct? Yes, it and I Miss Bradling might be able to tell us a little
032bit better, but they they do have there there are different structures to how thosearmacies are set up, which is where maybe the MedBen RX could provide additional savings than the the capability that Welldine has for us at this moment. And there could be other uh pharmacy benefits managers that can have additional savings for us, too. All right. So, another option um that we can look at is if we wanted to hold off on the state health insurance plan and to to take our time and in exploring other pharmacy and uh benefits plan administrators, we can always look at increasing our health insurance revenues by making changes to our current plan through increasing our premium rates, our specialty co-pays, our out-of- pocket maximums, and even possibly adding some additional fees for coverage. Um these changes can
033take place in September for next year. So this is a quick change that we can make um to our plan. A change that our finance team has implemented this year includes reimbursing the health insurance account for our retirey claims out of our OPE account monthly instead of quarterly. And this helps to take some of the strain off of our health insurance budget because of the reimbursements. They're coming in more of a timely manner now. Uh, and just for example, we put up here in January, the health insurance account received $313,61 in retiree claims and prescription reimbursements from the OPED account. So, at the February board meeting, we are bringing to the board two health insurance budget amendments for consideration. The first budget amendment is to cover additional medical prescription claims for the remainder of uh
034FY26. GMSD originally budgeted around 6.2 million for medical and pharmacy claims. And as of January 30th, the plane plan has already paid over 5 million in claims, which leaves us with a remaining balance of around 1 million with five months left in the fiscal year. Uh so currently the district has been averaging around $718,000 in medical and prescription claims per month. So we're requesting to add another 2.4 million into the medical claims account. And then that second budget amendment is to cover the increase in stop-loss premium rates for FY26. So, when we originally budget stop-loss premiums in April, we budgeted $1.1 million, but we don't firm up that stop-loss renewal into uh until August of every year. And so, that stop-loss renewal was confirmed for 1,130,726, which is a difference of $30,726. So that second
035budget amendment is just to shure up our stop-loss um premium payments for the rest of the year. Okay. So I know that this has been a lot of information um and so what we thought the board maybe could do now is discuss um about some potential next steps. Would you like for us to coordinate a vote with our employees to possibly transition to the state health insurance plan? Or would you like for us to explore a new pharmacy plan administrator? Um, and if so, do you want us to break our contract with Weldine? Or would you like for us to stay on track and go out to RFP next year? And would you prefer us to look at ways of increasing our health insurance revenue by making changes to our current health insurance through increasing
036our co-pays, our out-of- pocket maximums, and premium rates? And and I will say I don't think this is an all ornone discussion that we are going to have. I think what when when we think about our plan and what we have to do to make sure that we are essentially budgeting correctly, um we have to do some things first to cut our expenditures. So what are those things we have to do? We we had an incredible 11-year period where we didn't see increases uh in our cost, but but that has to be addressed now. So the things that we have to talk about are our maximum out-ofpocket expenditures for our employees. We have to make internal changes in our plan that that is going to happen. We are going to make those changes. There are
037going to be increases in in the funding. We're going to have to look at increases in for our employees and also for the the district. Um but I think the biggest challenge for us is I don't think we have been budgeting to account for this increase that we've seen in pharmaceutical costs. That's the short answer here. uh what we're if we take out those fixed costs that we see uh in our plan when we talk about the you know the stop loss, we talk about the health clinic, we're really talking about six $6.1 million that we're seeing in medical claims that that was budgeted. The real is that's that's not the real uh of what we should budget. What we are seeing is probably an 8 million or 8 to9 million um expenditures for for
038health insurance. That's that's the reality of of where we are. Um so I think that's part of our challenge here too is making sure that the board knows as we get ready to go through budget season. We're going to have to budget um you know cons assuming that it is going to continue to increase these costs are going to continue to increase every year and we haven't been aggressive. We haven't been u putting the amounts even even minimum amounts of what we should have for health insurance. So I think that's something that we need to address. Um really when we think about what does the board need to to look at and think about um moving forward for this is what do we want to do as far as those medical benefits? Um do we
039want to to hold a year and and and assume that we're going to budget a lot more money towards health insurance moving this next year? Do you want us to um look at other options? That's really the discussion that we think we should have. Now >> I've got a few different questions kind of on all the different options. So it doesn't mean that I'm considering one or the other. But uh let me start with the state plan. Do we have an estimate of savings if we were to move to the state plan? >> No, we don't >> because they can't. Um once again, they're each year they have to evaluate the health of their plan. And so if we say if our people vote that we're going to do this, then they'll say here's how
040much you're going to pay per per employee. So, we couldn't we couldn't we wouldn't know what the estimated cost would be until they decided to Yes. >> Okay. >> Um and then with uh changes to the current plan, do we have any idea if we would save the $500,000 we would by possibly switching to a different pharmacy benefits manager or would that be >> Okay. So I the $500,000 is I think you addressed is not really confirmed. I did go back in and look at the source data they used and they were including medications you have not been covering those bioimilars that were she had given the example of Stellara. There's also hum. >> Um so some of that savings is really not going to be actualized because you're already doing that. >> Um >>
041we made those changes. >> Yeah, you've already did it. >> We did those changes um at Christmas time. So really in January we should start we're just starting to see those month behind when you're paying on RX claim. So what we see for the February numbers is really going to be that that formulary change. Can you remind me what the rest of your question was? >> Yeah, I guess what I So what I'm thinking is okay, we can't make changes to the current plan until September or we could vote to end the contract with well done now, but that's a 180day notice. So basically, we're looking at roughly the same time frame of making either of those changes. So, do is either one of the does do do either one of those changes provide us
042with more savings than the other? That's kind of what I'm trying to figure out. >> I couldn't I wouldn't think that one would provide more savings than the other. I think that the reason we want to do the RFP is make sure there's not something missing out there. Um I I'm sure everyone is well aware that we have folks that are coming to work very well and doing their jobs very well taking extremely expensive medications with really complicated chronic disease. But that's what has happened in healthcare in general is that we are able to do that. So I can't guarant I would never guarantee either. I don't even like the word savings. I like cost avoidance as more of a term and I know that's probably some people probably like whatever it's the same thing.
043It's not um because every single year new meds come out. Stellar used to not exist. It wasn't a problem. Ompic used to not exist and now it's like, you know, you have this huge rush. So I I can't guarantee that it would be the same or more or whatever. I one way or the other. >> Okay. And then if we were to I guess go with an RFP and see if there is some sort of cost avoidance we can get there that would be achieved without uh our employees having to make additional payments through deductibles or or otherwise. Is that >> the idea? Well, I think that we we probably are looking at making changes to our plan regardless of um whether or not or when we are going to go out to RFP to
044look for a new benefits and manager manager. >> Yeah, we we are making changes regardless of what we do. We're going to be making changes because it because it isn't sustainable. >> Yeah. Yeah, I guess I'm just trying I guess what I'm looking at there is are we able to get some sort of savings or cost of when it's going out to bid without putting an additional burden on our employees that we're not already planning to be doing? >> Possibly. Yes. >> Gotcha. Okay. And then I think last question for me is changes that you're considering making to the plan. How do those compare to similarly situated districts around us? >> So So one of the things that I I think that we should consider is what's driving the cost. And I think Britney, I
045think you use this expression, you can't have a few individuals that have such high expenditures that it's strangling the plan. So, so when I think about what changes we need to make, we we need to consider, hey, do we need to treat um different things, uh when I say pharmacy versus the medical claims, do we need to treat those differently? So, what you see in some of the different plans, for example, there's a different maximum out of pocket for, you know, your pharmacy versus your medical claims. And so someone who is on some of these specialy drugs may would be required to pay more towards that that drug. Um but our goal is also the education piece of it. Uh when we were moving to the biosimilars, the goal here is to not leave people
046without medications. The goal here is to look and see, hey, do you understand that this is a $23,000 prescription medication and here's another product that can do the same thing for $3,000 a prescription. And and there are situations where that can't happen like if they're allergic to a sulfa drug for example and there's not another sulfa drug out there you know with the base of how it's made um then those can be exceptions but we want to force them through those channels. That's part of what that um pharmaceutical that company is doing for us. So um that's one of those changes that you could make. You could have a different maximum out of pocket for pharmaceuticals versus the medical. And when you compare our school district to other school districts in the area, um for
047for example, the municip municipalities, they only have one plan. Uh we have three plans that our employees can choose from. And our out-ofpocket maximums are lower than the municipalities out-ofpocket maximums. Our premium rates are lower for two of our plans and they're comparable to the one plan that the municipalities offer. If we were to increase our premium rates, some of those, you know, some of those premium rates are going to go a little bit higher than the um municipalities premium rates are. We have some more wiggle room where we could um increase our out-of- pocket maximums for our plans and it still be a little bit lower than the municipalities or we could match the municipalities too. So that's kind of a comparison um between us and the other municipalities right now. >> Gotcha. Thank
048you. Has there been any uh discussion about sharing the uh risk with a private insurance company i.e. Blue Cross Blue Shield etc. >> And that's one of those considerations when we talk about going out to RFP and and what we're doing know that um when we look at some of these different models they're negotiating directly with um Baptist or directly with Methodist. That's one of those options that we're considering too. But that's that's more like with our Lucent Health plan that we're currently on right now. we would be transitioning away from that and and moving into but yes that is a consideration of of what we're looking at but we're talking about short-term as we're dealing with the the pharmaceutical and those plans first that's the consideration once what are we in two or three
049for Lucent Health also so that's a consideration when we go out to to bid and decide what we're going to do with our our current health insurance plan Lucent Health that's that's one of those considerations that we need to Can we move back a couple of slides? >> It's two slides. >> Can you move back two slides? >> Sorry. I think it was two. Hold on. There were two seconds. >> There were two. Hold on. There we go. Next one. >> Nope. >> Forwards or back? >> Forwards. Forwards. Sorry, I only back two from where we were. Okay. Nope. Keep on going. I had two questions from one slide and then we got past it and I was like, where did it go? And it was about two suggestions or two options. Um, hang on.
050That's where we just were. >> Yes. >> Okay. Go back one, please. Okay. One more, please. Okay. So, like we were just talking about, I'm sorry, that's what you were hitting on. Um, the increasing the out-of- pocket maximums and increasing the premium rates. I think the superintendent was was just talking about specialy co-pays. Okay. And then um adding a fee for multiple member plans. That was one of my questions. So that's something we're not currently doing. >> Correct. >> Okay. That's what I >> wanted to clarify and verify. And then as far as um has there been any I guess I don't know how you would go about that but as you gauge these options with the employees like would you be more inclined to want to have a higher premium or a higher out
051of pocket those kind of things like is that something that's a reasonable survey type or just general or you get in the >> uh no I I I think I think Some of the real is like if you ask people no they don't want a change to their plan. Um >> sure option C none of the above but >> yes I I think for us the goal is the education piece to to see how we have spiked in our pharmacy costs over the past three four years. Um that's that's our challenges is that we have to explain to them hey it's just we can't the district cannot continue >> it's proof I mean it's evidence >> continue to afford a 23% with the rest of the world. Yes, I think that's the biggest thing. It's
052not it's not because of what we've chosen. It's not because >> what we have done is the budget part and that's what we are going to have to rectify. I'm trying to understand and think about it from how the impacts of the employees. So, um budgeting is what we're going to have to figure out. Yes. >> But understanding the options that may impact them and their financial stake in the plan. That's what I wanted to understand and I wanted to verify that we're not currently doing the adding a fee. So the adding a fee, can you just touch on that? >> Sure. Slightly. >> So we we one option that some businesses do is um adding a fee to have a spouse on your health insurance because that is not mandatory. You don't have to
053have spouses on health insurance. GMSC does. Uh if the spouse meets certain criteria, spouses are able to be on our health insurance plan. And so, >> but we we do currently have the spouse out plan, which means if they are eligible for insurance and another avenue or location, they can't be on our plan. So, if if you're going to have a spouse on our plan, you have to document that they either don't provide uh health insurance where they are uh they're part-time or they're not working. So, >> that was my understanding. Yes. Okay. Thank you for that reminder. But I had understood in previous discussions that was our current policy or or the way we Yeah. >> And and again just for for folks that might be listening, we're not saying we are going to
054do that. We're just saying that could be an option currently happening. It is a possibility that could be explored. Other people do it. It is a natural business practice for other companies. >> Right. >> Yeah. I I think the challenge with that um is when we look at what's driving the cost that's not going to have a huge impact on that's going to be a small small potatoes in the >> it gets back to we're back to pharmacy benefits and benefits managers and what are who are we using and how are they going to cover certain medications >> the end. >> Thank you. >> And I've been on was this U my fifth or I'm losing track of time how long I've been on the board. Um so I'm guilty of in years past saying
055hey you know champion hey we didn't increase the premiums and at the time it felt like that was the right move but we knew we knew this day would come and I think we were probably prolonging the inevitable and if I had to go back and do it all over again I probably would have said hey we we should see what's coming here and and do this. So, this isn't anything that I take lightly. And like I said, I guess I'll take responsibility for keeping things as low as we could while we could because like I said, at the time it really felt like that was the right thing to do for our employees, but we're, you know, we're here at the fork in the road. Um, and so we know status quo is just
056not optional. So, the matter based on and first off, I appreciate you researching the state plan. And I know I had talked to you separately about that and you know when you when you read about it it's like oh it looks great but I see some very detrimental things to the estate plan. First off we would lose our health clinic which I think is providing benefits to you know tangible benefits. we lose that and then adding a pool of retirees that we haven't really planned on that that's going to add to financial I think any savings we would have had cost avoidance um then I think we would be embracing more cost and that's certainly not what we want to do there so for me personally I think the state plan is just completely off
057the table so then it's a matter of okay moving into you know what can we do um it sounds like it's going to be an all the above of approach like I think we're going to have to we're gonna have to make adjustments and I think we're going to have to go and and go to RFP for the plan and I guess maybe for both. >> Um you know so I'm sure there's some options out there. Um you know I I just we're at a point where I think we're going to have to try to pull multiple levers and see if we can get to where we're going. And I am I'm optimistic that the changes that we made to the to the formulary hopefully will start realizing those savings here and then that then
058that will I think lessen some of the moves that we need to make. But I think make no mistake we're going to have to we're gonna have to make moves here. Um, you know, uh, yeah, I doing nothing, I think doing nothing causes other unfortunate realities to hit. So, we're going to have to do something because, you know, doing nothing is going to, you know, I don't even want to think about what that would lead to. So, uh, yeah, I I think I'm fine for whatever we can do proposal-wise. Um, you know, I think from us from a voting standpoint, um, I guess whatever you think and and feel free to, you know, discuss with the board members, you know, and get their thoughts on what we need to do to bring something forward, but
059I I think it's going to have to be an all the above approach. >> Yeah. the the the first thing that we would need to discuss before our business meeting and I'll have conversations with the board members is really around do we want to go ahead and try a different um pharmaceutical benefits group that that's our first decision that's really a time factor for us as we move forward we are going to be looking at changes internally for the plan that's what we're going to be working on we're going to be doing those all these things simultaneously and then when we get ready to go out to RP P. Uh, we can do that. The other option is to go ahead and make those changes um to our plan, stick with well done that we
060are right now, go to RFP at the end of the three-year contract, but know that as we get ready to go through the budget season, um we're just going to have to account for the fact that there's a dramatic increase in our health health insurance costs that we've seen over the past few years and make sure that we're budgeting um that amount of money. Is there any real downside in going out for an RFP earlier than later? I mean, do we think it's realistic that we wouldn't get something as good as we have now? Um just for me thinking it's such a quick turnaround time because we're already the end of February and um we have open enrollment coming up in May which wouldn't necessarily impact our employees that much with the pharmacy benefits manager
061but we'd have to go out to RFP make a decision and then have it all implemented by September 1st. So that's that's the a quick timeline right now. It can be done. Yes, but with no guarantee that there's going to be a change in the cost. We can go out to RFP and look and this is just what it is. Um that's always a risk. So I like to look at like what's worst case scenario and then of course we want to save money on obviously but that could happen and then you've gone out through all this stress for implementation of enrollment and it doesn't change really that bottom line. So >> all right. So according to uh Google 180 days from today is Saturday August 8th 2026. So what is so from a time
062frame? >> Yes. What are we looking at? you would the board would need to vote at the February board meeting. So that because my I was thinking March 1st is when our deadline to give notice to Well done would be that we are um giving them notice that we will no longer have that contract for September 1st. >> Yeah. Because I think you need to explain when does our health insurance start for our new employees versus those those don't align with the school year. >> Yeah. The plan year starts September 1st. >> So we would need to make sure that we would have everything ready to go by September 1st. >> Okay. So 180 days from February 24th, which is the business meeting, is going to be Saturday, August 23rd. So then that that we
063would slide right in under. >> Is there a risk and I guess kind of to Mr. strange point is there a risk of we break the con or you know we basically break the contract go out to RFP and then they come back and you know then we're looking at something more than what we have >> so okay that is real okay so I just want to make sure so >> one other thing we're not talking about so that's the contract part of it but then also we have to take it out to RFP we have to do analysis come back here you all vote on a new PBM they typically need at least 120 days to implement. So that's all the timelines that are kind of layering on top of one another. It's it
064that's all the chaos that will be going on. So just to understand the whole picture. So is I guess for this year does it does it because the timelines are so tight and to do all of that are we are we really going to benefit from trying to get something in February 24th or or are we better to keep pulling the levers that we can pull for now then just keep it on the normal timeline and then go out and do that because I see I see some risk here >> um that you know we we might end up getting into a situation that we don't want to necessarily be in. So now that I'm thinking through this, I'm just wondering, you know, if if we just don't rush it, follow the process, and then
065and then do what we were going to normally do. Um and then go out to RFP like we were going to on the timeline. Considering we're only a year left on it, >> I get the sense that's the district's recommendation or HR's recommend. >> That's HR's recommendation. I >> mean, too too much can can happen in a short period of time, forcing it, pushing it through to maybe not be any better off or potentially not as good as a position that we're currently in. and that that's that's not our usual operating logic. So >> I I am optimistic. I I I do think that um Miss Stratton with Britney's guidance that we've made real significant changes to our formulary that that are going to have an impact and we've seen that what what was the
066number 11 11% uh decrease that we I believe that we're going to continue to see those changes but once again like Britney you said when's the next Delara coming out or when's the next um medication coming out that's going to be a specialy drug that we're going to be in the same situation again. Um, I think we have made positive changes and we're going to see those with our our our formulary continue. But I think that um I feel comfortable with continuing where we are, but I just think the board needs to understand that when we get ready to do our um other funds budget also too when we get ready to do our general fund budget know that when we're looking at a 6.1 million that we've been budgeting for um expenditures for our
067medical claims, we should be looking at 8 to9 million for those um insurance claims. if we're if if we want to change what we've been doing. Um, now if we could still stick with a $6.5 million medical expenditure with the knowledge that we're going to be coming back about this time every year saying, "Okay, we need to add an additional 2 million into that that pot of money." Um, so that's just that challenge or risk that you take. >> Now, we we've known now for two we've had two years where we've had to move funds uh from reserves to cover. So, I think we just have to go with what we know. We would have to go with our run rate. And then if things somehow come in under budget, then we know we've got
068some extra funds. But I think two years is enough of a trend for me to see that we've got to go with real on the budget and, you know, and just we're just gonna have to figure it out. >> Yep. >> Okay. Hey, if there are no questions on our health insurance, um there is a budget amendment in there once again to shore up based on what we've been doing. Know that when the fact that we budgeted 6.1 million uh for our medical claims, I know that we were looking at and Mr. Kathy or Mr. Stratton, you can help with this. What was that a month? What was the monthly amount that we were saying? 600,000 a month that we had budgeted versus >> right 718,000 is what we've been seeing this year. >> Yeah.
069So, so that's the real of what we're seeing on the budget side. We have budgeted for about $600,000 a month and we're seeing about $718,000 a month for our expenditures. Now, that may improve because of the formulary changes that we've made. Um, but we'll see. >> Okay. And just so we're all on the same page, obviously we'll confirm, but right now it does not I don't feel that there's a will of the board to make any changes at the February meeting for as far as action items. And that's that can obviously the superintendent can confirm that. >> We'll have those conversation, but I'm not sensing that either. But >> Gotcha. Okay. >> Perfect. >> Thank you, Mr. Bradley. >> All right. Which leads us to item number two on our agenda, our FY 2526 budget
070amendments number seven through nine. So we will start with budget amendment number seven. Mr. Emanuel. >> So Miss Stratton is here. So once again, this is um the first one that we're looking at. Uh you can talk about for us, Miss Stratton. This is uh to fund additional board contribution to cover medical and pharmacy claims for the remainder of 26. That is number seven. Um >> slide back with the budget again. So, budget amendment number seven talks about shoring up our uh medical and pharmacy claims. Um so GMSD budgeted around $6.2 million for medical and prescription claims and as of January the 30th we've paid over 5 million in claims which leaves us with a remaining balance of around $1 million. And so we are asking for a budget amendment um for 2,469,274 to shure
071up our medical plan and prescription claims for the rest of the year. >> Yes. So, just so the board understands what we're talking about here once again, um when we are seeing an average of $719,000 a month, you assume that we're going to have that from February through June that we got five months of paying that. We have a million left in that account. We're talking about a two two almost $2.5 million um budget amendment to make sure that we're paying for it for the rest of the year. Yep. >> And we're fingers crossed that we we hope that this is Yes. >> Okay. And if anything, if the pharmaceuticals trend in the right direction, then then we're good. Okay. >> Yes. Absolutely. >> Um All right. So, Mr. Manuel, question for you now. And
072it's we'll say it's um dotted line related obviously. So, taking our reserves down, I know we had talked previously about allocation of reserves for some capital projects. I'm assuming that we're going to have to make an adjustment because there's a couple couple million less than what we were anticipating in reserves. So, I guess it's we don't have to answer that tonight, but as I'm as I'm looking at the number here, I I I assume there's going to be some downline impacts. >> Yeah. Yeah. So, one of the things that we're talking about, we talk about our capital improvement projects that we have coming and you have to look at cash flow. When are we talking about the money going out versus starting the projects versus finishing and paying for those? Um, that is something that
073we're have going to have to look at. know too that um when we talk about our money that we're receiving from county commission for capital improvements, that's always something that we have to wade into this formula too because those assumptions that we have around those projects that we want, we're assuming that we are receiving county commission dollars um in the next couple fiscal years. So yes, um but we're moving through that right now. >> Okay, that brings us to budget amendment number eight. Okay. So, budget amendment number eight is to provide additional funds for our stop-loss premium renewal fees for FY26. When we originally did the budget back in April, we budgeted for $1.1 million and our confirmed stop-loss renewal uh occurred in August and it was a difference of $30,726. So, we're just um
074asking to uh for that those additional funds for the stop loss premiums. >> Well, so that was some uh pretty impeccable budgeting on your part for that amount to only be off by 30,000. Job well done. Good evening. This one we don't actually have the budget amendment yet. We were hoping for state approval by today. This is for an allocation received for a grant for the Tennessee Allcore Innovation Tutoring Innovations and tutoring grant. And um but the background behind this is interesting because you know when the legislator legislative session passed the third grade promotion law and tied it to tutoring and they came out with the Tennessee allcore grant but then that went away after ESSER funding was gone. And then in this past legislative session, they brought back into Tennessee code annotated and said
075districts may I mean the state board may uh provide funds to districts for tutoring to support them with this uh academic tutoring required for for a third grade promotion. So that's kind of the background behind how this grant came about. They literally just told us about it in January and our team worked together to quickly uh develop the application over the snow days. So major shout out to Diane Stoval. she's overseeing the grant. Um along with the help of Dr. Ted Fuller for all the budgeting aspects and Latoya and Stuart um we were all working over the break on that and um Jenny Leford for contributing for the math tutors. So major team effort getting that grant in and we've already received um approval for $74,600. So that will go toward our tutoring program. They
076will allow us to use that um to pay tutoring personnel. So we already have a system in place. In fact, in 2022, we were found to be an exemplary district for our tutoring program, and we are included in the Tennessee uh best forall site, their online modules for training tutors. Uh so, we've been an exemplary district. We're excited that we just get to build upon that and have this innovation grant. And the grant did want us to have one particular focus area. And so, what we picked for our area is tutor training and development, coaching, and support because we want to pour into our tutors. Um, our structure is that we have 10 total part-time tutors and they work four days a week and work in that high dosage low ratio model where they are
077tutoring. It's a 1:3 ratio and uh we're just maintaining that model and we're going to use these funds to pay for our tutors and also supplement with additional training for them. Um, I have a few more little closing points I wanted to point out. Um, this will re it will renew each year. It's an ongoing grant. So, we'll just continue to submit the application. We had preliminary approval. They sent it back with one little tiny thing to fix in our narrative. And so, we already sent that back through today. We're expecting that to be approved hopefully in the next few days. So, we can bring the actual amendment to you uh in the next board meeting. So, any comments or questions? >> We're already doing such a wonderful job at it. We'll take their money
078to cover some of the cost. Thank you. >> That's right. Thank you. >> Yeah. Yeah, and kudos to your team for getting that done and being on top of it and pretty much nailing it on the first attempt, which is uh that's always a victory, I think, uh when it comes to that. So, um yeah, job well done and yeah, we'll take it. All right, that leads us to item number three on the agenda. Approval of special course application for honors facing history and ourselves. Mrs. Ael. >> Okay, so this is a actually an exciting night because Houston High School has their academic advising. I'm sorry that you can't be there if you have a high school student. Um, however, they are going to have so many opportunities to learn about the course selection process.
079So what I'm presenting to you right now is a special course application and you all have heard this multiple times um because you've I brought this to you in 2023 uh facing history and ourselves as one of our special courses. Last year we also brought humanities to you as a special course. But just to give some background information on what are special courses and why do we have those? So, the Tennessee Department of Education does allow districts to develop special courses that meet, you know, the unique needs of our students and of our district, which is a a great opportunity for us to be creative and innovative. And so, we actually have um seven, we've had seven special courses in the past. And three of those have been faded in or folded into the state
080actual courses now. So, they aren't considered special, but the state adopted them. So, we kind of paved the way for those. The only two we have remaining are humanities and facing history and ourselves. And so facing history and ourselves, while it was approved in 2023, um there is a social studies standards revision coming up. And this course aligns very closely to social studies standards. And so if you remember when I brought it to you just three years ago, this is basically the same application. Um but I do want to give a shout out to Dr. Laura Charbanet. She's our instructional supervisor that supports ELA, humanities, and CTE. and she did the alignment of the 2627 standards for social studies with 2728. And so all that was in the attachment that was just uploaded um for
081our website today. So that's basically the gist of why we had to bring this back after 3 years is because we needed to align it to the new social studies standards. Um but I do want to emphasize that like we look at various factors in considering our courses for special approval. Um we want to be sure that semester courses are a great thing to bring about. you know, helps with scheduling. Um, we also want to consider what's going to help develop that critical thinking and apply and help students think from different perspectives. And so, that's why we love this facing history course. Um, we also look at other districts and what they're doing for special courses. But, as you know, Houston High School has many courses to choose from already. And if you've seen the
082new course catalog, it's fresh on the website. Highly recommend parents going and exploring the website. If you just go to Houston High School, click on academics, you'll see everything there for your upcoming course selection. Um, but since we do have such a wide offering of courses, we are we really are just focusing on these two special courses for right now. And for approval, we need facing history and ourselves. Um, courses can also be teacher initiated, which is awesome. We've had teachers come to us before with ideas. So, we've we've had honors organic chemistry as a result of that. Um, I could go through more and more. Let me just give a little background information about the course itself. Um, this is tied to social studies and ELA especially, but it focuses on two pivotal moments
083in history, the Holocaust and the Armenian genocide. And like I said, the focus is on helping students develop multiple perspectives, develop their critical thinking skills, practice more so with all the core competenc competencies they need when they leave us from Houston High School, such as writing, thinking, um, having thoughtful discourse. Um, so that's what this course is designed to do. It aligns to ELA and social studies, like we said. Um, I I'll I'll stop there because I can keep talking about the course and all the awesome things we have, but let's see if you have any questions. >> Mr. Gates, have you or anyone you know taken facing history? >> Um, I don't know anyone that has taken it or at least no one's talked about it. I did, it used to be Mr. Robinson
084who taught the class and I had him freshman year and he had like the class um before mine and so sometimes he'd have things pulled up with it but it's always seemed very interesting. I've heard about it um quite a bit. I think there's some sort of advertising I see about it and it's great. Um reading about what it is like today before this, it looks is phenomenal and classes like these are um what our students need. So I'm all for it. It's interesting to me that when you look up this um course, there are several schools in Shelby County that offer it compared to the rest of the state. >> U I've spoken on this the last go round when we went through this exercise. There are components also that I've read about that
085are in the middle school levels that a lot of people kind of incorporate into other lessons. Um, if I recall when we went through this exercise in 2023, we Houston High School have offered this course for almost like since the inception of the school itself, >> over 20 years >> and it has been uh in high demand. Um, I personally have talked to students that have come from that course changed. I mean, just like loved the experience. But something that I really find telling is the parents feedback that I've received once their children have been exposed to this course just they're like, I wish everybody had to take it. um is something that I've heard multiple parents, you know, say, I wish it were something that everybody could have access to, but we have to
086pick and choose our schedules and that in the things that are extra that um are available. I just think it's important to note that it's popular, it's uh demanded, and um the feedback from parents and students alike has has been very receptive to keeping this as an available option at our high school. One of the benefits to the 4x4 block schedule is that it will allow students to take more electives. This will still be a semester course, which means it would be taken in a nine-week period. It's called a semester. It's a half credit course. I've got to quit using the the term semester. It's a half credit course. Um, so more students can take it now. We will have hopefully more offerings. We've had consistent enrollment, like we said, for 20 years. You know,
087um, this year we have 40 students. We've had anywhere up to 100 students. So, it's um hoping that it grows next year. >> I think it's important to continue to reiterate that it's optional. >> This is something that students choose with the support of um their parents in that process and it's just an available option. While popular, it's just an elective that has um had a longstanding history in our community. And I'd like to point out uh the Tennessee General Assembly in 2015 in a vote of 96 to0 uh recognized the the Armenian genocide. And so um you know just in case there's any wonder it's obviously was important enough to the general assembly to recognize that on the centennial of that. So to cover it in class I think is uh very appropriate and
088I'm glad we have that option for our students. So again, thank you for all of your hard work on that and um we'll hope for smooth sailing in the approval process and then I guess what in three years will be >> probably >> anywhere from one to three or six years. >> I do want to make one little final plug um for our textbook preview since we're talking about courses and materials and things like that. Um, we do have this year's textbook adoption is a smaller adoption, but it's still just as important. We have 9th through 12th grade lifetime wellness. So, that's for our high school PE course that all freshmen take. And then also we have our CTE STEM courses from 6th through 12th grade and computer science for the high school. Um, that
089textbook preview event will be Monday, February 23rd, so coming up in about two weeks here at district office. and we will offer two different times of the day for those who work. So on that day, you can come to district office from 8:30 to 1 or from 3 to 6. Um so we encourage all any any parent listening, spread the word. You know, we it was in our empower newsletter that went out Monday, but we hope to get parents here to review the materials, give us feedback, and then we'll take that to the textbook selection committee and come back to you in March um with selections. Did Did you say 9th through 12th grade lifetime wellness? >> I think I did. I was thinking high school. In my mind, I said 9th through 12th grade,
090but that is a good question. We do actually occasionally have a 10th or 11th or 12th grader, but it is designed more so for nth graders. >> One year. >> Yes, >> Mr. Gates. Mr. Gates was trying to see if he could get back in it. Can take it again. >> Take it again. >> Graduate. That's what I'm >> You only took it once. only one time. >> All right. Thank you. >> Y Thank you. >> All right. Thank you for that. Uh next item on our agenda, item number four, further business. Is there any further business uh from anyone? >> I assume we're what we covered in last month's work session will be on the >> Yes, we're going to carry it over to the business. There was no need to have a special
091called meeting in order to vote on those. We're going to add it all to the business meeting agenda. Okay. Okay. So, without uh any additional business, this meeting is adjourned.