BROOKSVILLE — The Hernando County School District’s switch to a self-insured employee health plan has been pushed back a year after Florida Blue disclosed two high-cost claimants that could have left the district exposed to large, unplanned medical bills.
The School Board voted 5-0 at a special meeting Oct. 30 to stay fully insured with Florida Blue for 2027 and to join the Florida Educator Health Trust, a nonprofit insurance pool known as FLEHT, in 2028. The district also plans to open an employee health clinic in 2027 as part of the transition.
Several members made clear they backed the plan reluctantly, and two accused Florida Blue of holding back the information until the last minute.
The board voted 3-2 on Sept. 22 to become self-insured, with Florida Blue administering the plan and FLEHT providing coordination and oversight. Board members Michelle Bonczek and Shannon Rodriguez voted no. On Oct. 30, Rodriguez said she had opposed the move because too many questions were unanswered, the district would take on significant liability, and the vote came the same day as the board’s workshop on the subject.
FLEHT pools Florida school districts so they can buy coverage at a scale and price that districts self-insuring on their own can’t get, according to the trust’s website.
The ‘lasers’
Under self-insurance, the district would pay employees’ medical claims itself and buy stop-loss insurance to cap its exposure to catastrophic cases. Florida Blue, which was to provide that coverage, informed the district of two “lasers,” provisions that set a much higher deductible for specific people expected to run up large medical costs.
That means the stop-loss coverage kicks in much later for those individuals, shifting more of the risk back to the employer. A plan with a standard $75,000 individual deductible, for example, might set a lasered person’s deductible at $150,000 or more, according to SharxPlan, a health benefits website.
Bruce Green of FLEHT, who attended the meeting, said two very high claims emerged after the board’s vote. Staying fully insured for another year shields the district from them, he said.
“Florida Blue is honoring the fully insured quote they had prior,” Green said. “Those will all be covered under their plan for the year. ... No rate change. It just protects them from the ‘lasers.’”
Board frustration
During roughly an hour of discussion, board members Mark Johnson and Susan Duval accused Florida Blue of deliberately withholding the information. Green said the insurer might not have known about the two claims when the board made its original decision.
Duval said the board agreed in September on a plan built around FLEHT, with Florida Blue handling administration, pharmacy benefits and stop-loss coverage, only to learn the insurer hadn’t shared everything.
“We are now in turmoil regarding insurance again,” she said.
Florida Blue held firm on its 23% premium increase throughout the process, Duval said, then disclosed late that a couple of people were “running up claims” that would affect the stop-loss coverage. She said she hadn’t heard the term “laser” before, and that other districts trying to join FLEHT are running into the same problem.
“I feel threatened by Blue Cross, and that is bothersome to me,” she said. “They didn’t put all their cards on the table to begin with. How can I trust them now?”
Johnson asked why the district couldn’t get the information from Florida Blue, arguing that releasing it wouldn’t violate HIPAA, the federal health privacy law, because the people involved are district employees. If more than three districts are in the same situation, he said, they may have grounds for a class-action lawsuit that would force the insurer to turn over the data. Other companies hide information the same way, he said, and a lawsuit threat may be the only way to stop it.
Johnson and Duval suggested finding out whether Florida Blue had delayed disclosing lasers to other school districts and whether Hernando should join them in a class action.
Board attorney Robert Meyers cautioned that a suit could mean years of litigation, saying Florida Blue has likely done its research and has case law on its side.
“It’s something we could take a look at because there are always loopholes in these things,” he said.
The insurer may be entitled to withhold proprietary data, Meyers said, but not all of it, and it should have disclosed the lasers if it knew about them.
Rodriguez said she doubted Florida Blue, with its own legal team, would act so carelessly that a district would sue.
The decision
Rodriguez urged her colleagues to focus on keeping staff insured. Self-insurance remains the right long-term move, she said, but the board needed to make a decision now. She asked Superintendent Ray Pinder for his recommendation.
Pinder recommended staying fully insured with Florida Blue for 2027 while continuing to work with FLEHT on onboarding and opening the clinic, putting the district in a stronger position for 2028. The clinic would also give employees a less expensive place to get care, he said.
FLEHT will put plan administration, stop-loss and pharmacy coverage out to bid for 2028, Pinder said, sparing the district the cost of hiring consultants.
“Maybe the bids won’t be as high,” he said, adding that the approach is a strategy, not a promise.
Chairwoman Kayce Hawkins said there wasn’t enough time to shop for other stop-loss coverage before the new plan year.
Johnson said he supported the motion and pursuing a lawsuit. Duval said nothing would stop Florida Blue from “pulling the same stunt” again next year.