Roaring Fork School District

In late September, news broke that the Roaring Fork School District (RFSD) was making an unexpected shift from a self-insurance health plan back to a managed health care plan, at significant cost to the district. While a shock to the public, the decision was the result of months of review on the first year of implementation of the self-insurance plan. In recent weeks, District Superintendent Anna Cole shared insights with The Sopris Sun about what happened and how the district is moving forward.
Starting near the end of last school year, the RFSD internal Human Resources and Finance teams reviewed the district’s first year of the self-insurance health plan. These operations teams found that the district underestimated the true cost of the self-insurance plan in terms of capacity to administer and funding required to implement the plan without significant financial risk. While there are already sunk costs and switching plans exceeds the district budget, the RFSD operations teams report that returning to managed care has projected savings of $600,000 to $800,000 and significantly minimizes potential financial risk.
In mid-September, RFSD began sharing updates with staff and gathering input. Employee feedback centered around concerns about why the self-insurance plan costs had been underestimated, fears about individuals bearing financial burden if costs increase, details of healthcare coverage during the transition between plans, and questions about long-term implications for salaries and benefits. The district also contracted and retained consultation from Spencer Fane LLC, The Segal Group, McMahan and Associates, former RFSD CFO Shannon Pelland and RFSD general counsel Semple, Farrington, Everall & Case, P.C.
By late October, the RFSD board recommended the Board of Education pass the resolution to terminate the self-insurance plan with Think Health effective Dec. 31, 2024 and switch back to a managed-care plan through CEBT as of Jan. 1. Following the resolution, RFSD has entered Phase II of their decision-making process. The priority in this phase is to identify and recommend options for addressing the increased cost of employee benefits this school year. RFSD board director Kathryn Kuhlenberg has committed to joining the advisory committee for that process.
Possible considerations include additional deficit spending, increasing plan components like copays or deductibles, or postponing or reducing district initiatives to reallocate funding. In the October meeting, the RFSD board recommended that all increased costs during this school year be borne by the district and not passed along to employees. The intent is for the Health Insurance Advisory Council to bring recommendations to the RFSD board by the end of the calendar year.
In January, February and March, RFSD intends to move into Phase III of the decision-making process, to identify solutions for addressing health insurance costs in the 2025-26 school year. Superintendent Cole was candid about the challenges of the situation. “The challenges with the change are the additional costs of the plan that were unanticipated in the 2024/25 budget. Addressing those and future increased costs to health insurance will remain incredibly challenging for us,” she said.
However, Cole is optimistic that one of the outcomes of this change process will be more resilient administration and operations for the district. She shared, “In terms of successes, I believe that the systemic changes we are making related to managing contracts, health insurance plans/systems and general financial practices will make our operational systems much stronger moving forward.”
The short-lived self-insurance model had been selected with the best of intentions, but the district didn’t have adequate capacity for it to function well for most staff. Cole explained, “I hope the community understands that RFSD teams had the best intent regarding the switch to self-insurance but ultimately underestimated the risk and the management/coordination needs of a self-insurance plan. As a result of staff turnover, very small operational teams and very high costs of health insurance, the volatility of a self-insurance plan became significant.”
The district is providing public updates on the process of addressing the insurance change and associated budget shortfall about once a month. Internally, RFSD leadership started updating staff on a weekly basis during the month of November. While Cole anticipates a difficult 2025/26 budget for RFSD, she reaffirmed the intent to protect staff salaries.