Health insurer for CCSD teachers says it’s confident it can repay $35M loan

The CEO of the health insurance provider for Clark County School District teachers says he has a “very high degree of confidence” the insurer will be in a good position to pay back a $35 million loan from the school district.

THT Health — which has faced years of financial turmoil and received multiple bailouts — gave an information-only update to the School Board Thursday.

Referencing recent audit findings, CEO Tom Zumtobel told the board that the insurer continues to do well, while also noting it keeps hitting financial and service standards.

If it wasn’t for inflation, THT was expecting all last year to not have any cost increase for members, Zumtobel said.

But for this benefit year, which took effect in October, some teachers who have multiple family members covered under their plan saw an increase, with premiums nearly doubling in some cases.

Claims resolved

THT Health insures about 34,000 people — licensed professionals and their family members — and is overseen by the Clark County Education Association teachers union.

Teachers have repeatedly voiced concerns about their insurance, saying in years past their medical claims weren’t paid and that they were dropped as patients by their providers. Some were sent to collections due to unpaid medical bills.

The district provided a $35 million advance to the health trust in May 2021, which must be repaid by June 30, 2024.

THT is required to provide financial updates to the School Board, a stipulation of an October 2021 agreement between the district and teachers union.

Under the agreement, the insurer is also required to settle past due claims.

THT resolved approximately $253,000 in outstanding claims, according to the presentation. It also mitigated $4.9 million in litigation.

THT Health received an “unqualified” opinion — meaning financial statements were presented fairly — on its yearly independent audit for the fiscal year that ended June 30, 2022. The audit report was issued in late December.

Ongoing concerns identified included liabilities on the book, like the $35 million loan that has to be paid back and retiree obligations, according to the presentation.

Trustee questions

Trustee Linda Cavazos said the board has received a lot of questions about long-term care, such as cancer treatment. She asked if those outstanding claims have been resolved.

“Definitely resolved,” Zumtobel responded.

THT had challenges negotiating a contract with Comprehensive Cancer Centers of Nevada, he said, but it was one of the earliest to be resolved.

The insurer reached a settlement with the cancer treatment group in 2021. The medical group previously said it hadn’t received payments for more than seven months and wasn’t accepting new THT patients during the dispute.

Cavazos also asked for clarification about the $35 million loan from the district.

The district essentially prepaid three months of its contribution toward insurance, the district’s Chief Financial Officer Jason Goudie said.

From the district’s accounting perspective, it’s a prepayment, Goudie said. From THT’s perspective, it’s considered a loan because they have to pay it back, he added.

Cavazos asked if there’s any interest charged and Goudie said there’s not.

Trustee Lola Brooks questioned how the insurer will meet challenges in the future while minimizing raising premiums for teachers or reducing benefits.

A significant part of the progress THT has made is reducing administrative expenses, Zumtobel said.

A presentation to the School Board shows the insurer reduced administrative expenses during the 2022 fiscal year by nearly $6.7 million compared with the previous year, but Zumtobel said it’s actually tracking closer to $10 million.

The service hasn’t suffered, he said, but THT implemented ways to accommodate members such as virtual customer service visits.

Board President Evelyn Garcia Morales asked how THT’s cost to members and its offerings compare with other large urban school districts as well as with other Clark County School District employee groups.

THT compares “very favorably,” especially on plans for an individual employee or an individual plus one, Zumtobel said. He also cited a plan with a $500 deductible.

Garcia Morales asked how many people fall into the category of being insured as an individual or individual plus one, saying “we have a diverse workforce.”

About 60 percent of those insured are an individual or individual plus one, Zumtobel said.

Garcia Morales said the board has also heard concerns about dental insurance coverage and asked Zumtobel for clarification.

During the open enrollment period, THT communicated that if members don’t make a selection between an HMO and PPO plan, they would be automatically enrolled in the HMO plan at no cost, Zumtobel said.

He said THT communicated that to members four or five times via email and through the school district’s communications department.

“I really feel like we were fair in that regard,” he said.

Zumtobel said he’s not sure what else they can do with communication, but the insurer will also mail letters next year.

Contact Julie Wootton-Greener at jgreener@reviewjournal.com or 702-387-2921. Follow @julieswootton on Twitter.