Self-funded workers' compensation
Switch expected to save schools $200,000 a year
Upper Arlington City Schools began a self-insured workers' compensation program this month that is expected to save the district about $200,000 a year.
Treasurer Andy Geistfeld said the program is "one more thing the district has been working on over the last two years to find ways to save on expenses."
Geistfeld and Chris Potts, district business services director, presented information about the program to school board members during a workshop meeting in April.
"We had to apply for the program and meet certain criteria with the Ohio Bureau of Workers Compensation," Geistfeld said.
"We had to be in a solid financial position and have a minimum of 500 employees, along with other requirements."
He said school districts that have many workers' compensation claims might not want to be self-insured.
"For our history, it made more sense to be self-insured because it helps us control our expenditures and improve on our safety needs," he said.
Geistfeld said Potts and his staff will oversee the program.
"Overall, employees won't notice a difference," he said.
The district was approved for the program last month and switched to the self-funded program on Sept. 1.
During the presentation in April, Potts addressed the district's history of workers' comp expenses.
The estimated five-year cost if the district kept paying premiums to Comp Management was a little less that $1.6 million, whereas the estimated cost to be self-insured for five years was $740,000.
The projected annual cost comparison over five years with one maximum-value claim was a little less that $1.76 million through Comp Management and a little less than $1.1 million through the self-funded program, a savings of $662,000, he said.
Geistfeld said the district has to build up a reserve fund, use a third-party adviser and obtain stop-loss excess insurance to protect against catastrophic claims as part of the self-funded program.
"Even with those expenses, we will save about $200,000 a year after two or three years," he said.
Potts said becoming self-funded is "the responsible thing to do."
"We will be serving our employees and their injury needs as well as serving our taxpayers," he said.
"Generally, we have a safe workplace and don't have a lot of injuries over the years," Potts said.
"It makes more sense to be on our own instead of being lumped into a larger group where we are all paying for the injuries of each other."
Potts said the savings can be put back into the general fund.
"Our third-party administration, CareWorks, is also working with Worthington and Olentangy schools, so they are experienced with school districts," he said.