BISD hires insurance consultant

The Brownsville Independent School District has hired a former health insurance consultant as the district prepares to name a third-party administrator for its estimated $40 million self-funded employee health insurance plan.

At its June 2 meeting, the BISD Board of Trustees hired Gary Looney of Alamo Insurance Group as the district's insurance consultant for an annual fee of $48,000. Looney will provide analysis of incoming proposals from potential third-party administrators to process payments and claims under the district's health insurance plan in an effort provide the best value to district employees.

The current third-party administrator is AAG Health Smart Inc., which is in the second year of a three-year contract.

Health Smart's consultant to BISD, Lance Pendley, of McGriff, Seibels, and Williams of Texas, recommended going out for TPA bids after BISD's costs increased under Health Smart.

Pendley and McGriff had the low bid on the consultant contract at $35,000. Also, BISD's employee insurance committee had recommended awarding the contract to McGriff. However, Trustee Joe Colunga questioned the wisdom of awarding the consultant contract to a man who represents Health Smart.

Colunga pointed out that while utilization of the plan increased by 20 percent in 2007-2008 and the amount paid per claim with an employee co-share decreased, claims reaching $100,000 to $249,000 increased and the percentage of claims receiving network discounts decreased to 42 percent in 2007-2008 from 45 percent in 2006-2007.

In a report to trustees, Pendley noted that from 2006-2007 to 2007-2008, BISD had experienced:

• A $3.98 million increase in claims
• A $1.43 million increase in large claims
• An increase of $658,786 in employee co-shares
• An increase of $566,186 in drug costs
• An estimated $1.2 million in decreased discounts

At the previous board meeting, a motion to award the consultant contract to McGriff failed for lack of a second. At the June 2 meeting, the BISD administration recommended awarding the contract to either McGriff or Alamo, saying that both had a good working relationship with the district.

Colunga said saving the $13,000 difference between the two bids might turn out to be insignificant compared to the higher costs incurred under McGriff and Health Smart.

The vote to award the contract to Alamo was 4-3, with Colunga and Trustees Rolando Aguilar, Ruben Cortez Jr. and Rick Zayas voting in favor and Trustees Dr. Enrique Escobedo, Catalina Presas-Garcia and Minerva Peña voting against.