Orange-Ulster School Districts Health Plan
Harriman, NY 10926
Health Plan History and Background
Reason for forming a Self-Funded Plan – The Orange-Ulster School Districts Health Plan was formed in 1983 by the Superintendents of school districts of Orange County in order to provide a health plan that would maintain a good level of benefits and at the same time allow the school districts to maintain control of costs, and control of benefits.
In the late 1970s and early 1980s, health plan costs for the school districts participating in the New York Statewide Plan were rapidly increasing. Benefits were changing as a result negotiations between the State and State employee unions. The level of service experienced by the local school districts was extremely poor. Enrollees felt they could not resolve issues easily and they were not able to understand why claims were not paid as they expected. Local school districts, as participating agencies in the Statewide Plan, felt they had no control over costs, benefits or service.
The school districts hired a consultant to review options that would allow the school districts to maintain a high level of benefits, contain costs, and provide service. The original proposal by the consultant was to establish a self-funded Health Plan with hospital benefits administered by Blue Cross and major medical benefits funded by the Plan. Blue Cross was not very cooperative and appeared to discourage the formation of a self-funded Health Plan. At that point, the school districts of Orange County decided to form a fully self-funded Health Plan, hire a TPA to pay claims, and form a Board of Trustees to oversee the level of benefits, and establish premium levels.
Formation of Health Plan – The Health Plan was originally established under Article 5G of the General Municipal Law. The Plan operated under that Law until other self-funded health plans organized under the same Law were challenged by the New York State Insurance Department and by Blue Cross. The issue was resolved by the addition of Article 47 of the New York State Insurance Law. This Law allowed for municipal cooperatives to operate under the authorization and supervision of the New York State Insurance Department.
Joining the Health Plan – In order to join the Health Plan, a school district must make the commitment and sign a joinder document. The commitment requires a Resolution by each school district’s Board of Education.
Guiding Principles – Over the years, the Board of Trustees has developed several guiding principles under which the Plan operates.
- Maintain enrollee choice as much as possible
- Maintain a balance between enrollee and Plan cost sharing
- Avoid adverse selection
- Provide catastrophic coverage not necessarily first dollar coverage
- Be competitive with similar plans available to participating districts in terms of level of benefits, cost, and service
- Provide a vehicle for enrollees to understand the Plan, (why benefits are paid at certain levels)
- Provide an avenue for enrollees to seek answers for their questions