Health trust faces $838,000 shortfall

A health trust for employees of Lorain City Schools faces a projected shortfall of $838,000 by the end of the year, officials said.

“We’re kind of in a bad way,” said Lorain Schools Treasurer Joshua Hill. “We just wanted to get through. We didn’t want to make any tough decisions prior to the break until everybody got back.”

The board passed a loan action, but the loan was never taken out during the summer, Hill said.

“Claims didn’t get better, but they at least stabilized,” he said. “So we weren’t having increased costs.”

The board met again Aug. 31.

“At that point, it was presented to the trust by the actuary to get through the end of calendar year 2017, they were projecting about an $838,000 shortfall,” Hill said.

Lorain Schools Chief Executive Officer David Hardy Jr., Superintendent Dr. Jeff Graham and Hill are considering plan design changes, short and long term options, ways to get through the end of the year, different providers or creating a greater gap between an A plan and a B plan.

They considered a wellness plan, which was tried in the past but not incentivized enough to make sense, Hill said.

The trust also may ask the board to advance a $400,000 amount negotiated over three years, he said.

“Basically, that’s to buy some time until they can figure out a long term plan,” Hill said. “But still that makes up less than half.”

If the trust does not find a way to make up the difference, then claims will not be paid and school district employees will be held fiscally responsible for the shortfall, he said.

The trust includes 490 families.

The problem was not caused by mismanagement, Graham said.

Rather, the district experienced about a dozen costly illnesses recently, he said.

In a normal year, the district logs three claims of this size, Hill said.

If employees were to absorb the cost it would be a 72 percent increase in their premiums, he said.

The trust board is considering other companies to provide the services, Hill said.