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MSSU Pursues Switch to Self-Insurance - KOAM TV 7

MSSU Pursues Switch to Self-Insurance

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  Missouri Southern State University develops plans to make the switch to being self-insured.

The change could have an impact on the university financially.

Board of Governors member Jim Fleischaker said, “The university is considering self-insurance for the simple reason we think it will save us money."

Fleischaker says consultants,  Arthur Gallagher and Company presented  self -insurance options after being hired by the administration.

 He said, "They came  back with the indication we would save quite a bit of money by doing this. Once we got their indication it would save us a lot of money, we decided to pursue it and really that’where we are now.”

When it comes to potential savings, Fleischaker estimated, "I think we're talking tens, hundreds of thousands."

The move to self -insurance isn't a new trend. The city of Joplin made the switch after a vote in 2010.

Fleischaker said, “A lot of companies have been doing this in recent years. Of course, the cost of medical care and medical insurance has been rising steadily and far outpaced the general cost of living."

MSSU professors and staff recently received a raise of two and half percent.

MSSU Math professor David Boswell commented then, "I think we're doing ok at the moment. Health insurance prices higher than we like, that’s true for everybody right now."

MSSU has an insurance committee, and the change could come as soon as January 2017 according to a time line explained at a Board Budget Audit Committee meeting.  Those minutes indicate details to be worked out in July, administrator selection interviews in August with open enrollment in October and ID cards issued in December.   Insurance premiums and costs haven't been outlined, but being self- insured allows an entity to negotiate rates typically hiring a third party administrator for the filing of claims.

 The city of Pittsburg has long been self- insured but in 2015 dropped Blue Cross Blue Shield as its third party administrator, contracting with five different partners for things like claim filing, dental and pharmaceuticals. The move saved the city two hundred thousand dollars.

Fleischaker added, "By self-insuring up to a certain point  you're gonna save a lot of insurance premiums but to avoid a catastrophe, you have a back-up insurance company that does come in after you pass a certain point."

For Pittsburg that's stop-loss insurance. And MSSU board members would incorporate risk mitigation strategies to the university's plan as well.

MSSU board budget committee members noted that under an insurance policy insurers pay taxes to the federal and state governments but self- funded plans do not pay these taxes.

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