The Best of All Worlds:
Cost Containment and Freedom of Choice

      Now in its 17th year, the Cooperating School Districts Insurance Trust provides insurance benefits to 24,000 school employees, spouses and dependents in 32 school districts. The Insurance Trust is a voluntary program for members of CSD. With a premium base of $100+ million, the Insurance Trust continues to grow because participating schools are containing costs, with medical insurance costs rising at well under half the statewide average, and enhanced life insurance which cut costs by up to 50% for districts.

      The trust has become a powerful force with enough people in its insurance pool to attract the best insurance providers and administrators, offering the most competitive rates and highest service levels. Taking full advantage of this leverage, the trustees and advisory committee managing the program can choose an insurance provider that allows the most freedom of choice for employees. As required by law, the trust holds competitive bidding every three years, obtaining rate guarantees for the period.

      By using a managed care model, employees get the cost savings of an HMO format but retain the right to choose their physician. Participants can select network or non-network providers without consulting a primary physician and still get a high level of benefit. Insurance Trust coverage also includes a rich set of features, even some preventive care options such as substance abuse and chiropractic services.

New Developments

      The keepers of the Insurance Trust continue to find new ways for employees to save money on insurance. One option allows employees to purchase property and casualty (homeowner, automobile and general liability insurance), long- and short-term disability and dreaded disease coverage.

Why the Insurance Trust Works

      The bottom line: The larger the group, the greater the leverage. The size of the Insurance Trust gives members buying power. Costs are stabilized, favorable renewal terms are negotiated and coverage and service is better.
      Why? The size of the Insurance Trust produces an experience pool that is stable over time. A larger pool provides more balance and less risk to an insurance company. For example, if one school has a bad year (many or expensive claims), other schools have a good year.

      Insurance Trust rates have stabilized. Before the trust, any school district could experience double-digit increases in any given year. Now, virtually every district in the program has seen a reduction in cost since joining and costs increasing at half the rate of surrounding non-member districts.

Who's Minding the Trust?

Advisory Committee and Trustees

      An advisory committee is made up of one representative from each school district participating in the program. Members meet quarterly to review new changes in the marketplace and look at new products. They also participate in periodic evaluations and bidding for insurance providers and administrators.

      Advisory committee members elect two trustees who serve two-year terms and manage the program along with the chief executive officer of BSD. The trustees are the final decision makers and are also responsible for the program's finances, managing the Insurance Trust bank account and yearly audits.

Administrators

      The Insurance Trust administrators provide the advisory board with options for insurance. They are familiar with the unique requirements of school employees and help design a program that meets these requirements.

      Frequently more than one vendor provides insurance, so administrators provide one point where all programs converge, tracking who's enrolled where and making sure each school district gets one bill.

      The administrators also provide supplemental customer service to participants and act as a intermediary when employees have questions or problems with claims.

Business Services

      Behind the scenes, BSD provides structure to the Insurance Trust. In addition to providing one trustee, BSD's staff act as facilitators, coordinating and monitoring the program to make sure activities stay on track.

A History of the Insurance Trust

The Road to Consensus

      In mid-1990, business managers at several St. Louis schools knew they had to take action. They were alarmed by the accelerating cost of insurance: double-digit premium increases and increasing deductibles and co-pays. In spite of past failures and their own skepticism about the outcome, they approached CSD's new Business Services organization and together spearheaded an investigation into one option - a consolidated insurance program with one centralized administration.

      The early organizers' task of gaining consensus from a large group of economically and geographically diverse school systems was intimidating. It took them a year to develop a generic foundation, select an outside administrator and bid for an insurance provider.

      Despite the size of the original group, the committee was fortunate to find a supportive provider that saw the long-term potential in a consolidated insurance program.

For More Information about the CSD Insurance Trust,
call Steve Keyser at 314-692-1266