RE-1 Valley searching for new health insurance broker – South Platte Sentinel

RE-1 Valley School District is looking for a new health insurance broker. At a school board meeting Monday, Cindy Pilkington, of Pilkington Financial, announced that with a great deal of soul searching last year, she has decided to retire from the large group segment, which includes RE-1.

“I will continue to focus on our small groups, individual, and Medicare eligible population. I have been in this business for 36 years and feel it is time to move forward with my other business and interests,” Pilkington said.

She encouraged the board to consider hiring Tim Hebert, managing partner at Sage Benefit Advisors, to take her place. Since Sept. 2021, Pilkington has been working on her transition with Hebert for her large groups in the Front Range. Hebert has a staff of 16 employees, has been the State Legislative Chair for the Colorado State Association of Health Underwriters since 2016 and is also on the Producer Advisor Board for Connect Health and the Colorado Division of Insurance.

“This job requires you to review all bills related to health, life, etc. He has a wealth of knowledge in the healthcare arena to bring to the table,” Pilkington said.

Hebert will take over Pilkington’s job effective April 1. Before she leaves, she will be providing Hebert with all the information he will need for RE-1’s renewal, which won’t be available until mid-April. Hebert will go out to bid with all carriers to provide competitive quotes for the district.

“Tim knows my passion and commitment to my clients to do what is best for them. He will do the same for RE-1,” Pilkington said.

She and her associate, Sandy Zimmerman, thanked all of the staff in RE-1 past and present for “making this working experience the best. Sandy and I have loved serving you for the past eight years.”

Prior to Pilkington’s comments, RE-1’s human resources director, Diane Stallard, shared that she and Nichole Eastin, human resources/accounting, have reached out to other insurance brokers, including USI Insurance Services, RE-1’s workers’ compensation broker of record, and HUB International. She advised the board that she was unable to attend the meeting with HUB and needed to speak to Eastin about plans moving forward. They would like to have bids out by the board’s March 21 meeting.

“I understand you have companies wanting to offer a comprehensive plan to the district. Sage Benefits is a health insurance and employee benefits agency, they are not a property and casualty company offering to do all of your benefits. This business is very difficult and I hope you take that into consideration when you are presented with options,” Pilkington told the board, pointing out that Hebert “knows the intricacies of this business. You can be a Jack of all trades and a Master of none. Tim Hebert is a Master of one.”

Prior to her retirement announcement, Pilkington shared a mid-year analysis.

RE-1’s current plan with Cigna is a Level Funded plan with a 50% surplus arrangement, meaning that if the group ends in a surplus at the end of a plan year they would receive 50% of the surplus.  For the prior plan year with Cigna, beginning July 1, 2020, and ending June 30, 2021, RE-1 had a $160,800.29 surplus, with $80,400.15 was credited toward administrative costs in the fourth month following renewal.

RE-1 averaged 208 employees and 217 members in the current time period of July 1 to Dec. 31, 2021. The average age of members enrolled on the plan in this time period was 41, which is younger than it has been in the past.

The plan for catastrophic claims was 75.6% of the total plan cost. Pilkington said there were 12 catastrophic claims with a cost of more than $50,000 during the first six months of this plan period.

Additionally, emergency room costs decreased substantially and employees had a preventative care utilization rate of 75.1% in the current period, which was an increase from last year. Both of those are good things.

RE-1’s cumulative claim funding, the running total amount of premium each month set aside to pay claims under the $50,000 threshold, was $691,682.23 for the first six months of the plan period.

Monthly claim payments is the amount paid each month for claims under the $50,000 individual stop loss (the district is responsible for the first $50,000 in claims of an individual and claims that exceed the individual stop loss are paid by the specific stop loss carrier).  Pilkington pointed out that the district had some large claim payments the first three months of the plan period, but minimal the last three.

Additionally, through the end of December RE-1’s cumulative claim payments (total claims paid year to date under the $50,000) were $649,664.11 and when comparing the cumulative claim funding to the cumulative claim payments the district had a cumulative surplus of $42,018.22 for the sixth month period.

“That was a real plus for us, we’ve never had a surplus in our life,” Pilkington said.

The total claims paid from July 1-Dec. 31, 2021 for RE-1 is $1,250,622.10, of that $649,644.11 are the claims under $50,000 paid by the district and the specific stop loss benefit payment is $599,842.91, which is all claims over $50,000 paid by the specific stop loss carrier.

From what Pilkington can tell, RE-1 had one large claim for $325,615.17 and five others that went over the $50,000 stop loss. She pointed out that it seems the majority of these claims were one and done, but a couple are ongoing.

The total claims that have been paid out by Cigna and RE-1 through Feb. 28 are $1,445,753.45.

“Some good news, as of Feb. 28, RE-1 has $115,518 in surplus to pay claims under the $50,000 individual stop loss. This is the portion you could split with Cigna at the end of the year if it continues in this direction,” Pilkington told the board.

However, there was bad news is with the specific stop loss portion that pays claims over the $50,000 threshold. The re-insurance carrier as of Feb. 28 has paid out close to $672,000 year to date.

“This is what will affect your renewal,” Pilkington told the board.

Since the district began with Cigna in July 2019, Cigna has offered the district $10,000 each year to promote wellness. The first year, money was spent at the Northeast Junior College Bank of College Event Center for free workout memberships to all RE-1 staff. Unfortunately, there was very little response from staff.

For the 2020-21 year, $10,000 in Fit Bits and Apple watches were purchased for a drawing that will be held at the end of March that is open to all staff, not just those on insurance, who did their preventative checkup, participated in the water challenge, or did maintenance visits. Staff is encouraged to submit an affidavit signed by their doctor, an explanation of benefits for a maintenance visit, or a declaration that they have been participating in the water challenge.

Winners of the drawing will be notified in April.

RE-1 will receive another $10,000 benefit for the 2021-22 year. Tiffany Virgil, the new leader of the district’s health and wellness committee, has been working with Cassie Storm, with Cigna’s health and wellness team, to determine how the district will spend this year’s benefit.