The Bozeman School District will deliver health insurance to its hundreds of employees in the coming school year without charging any increase in monthly costs, and it will start covering mental health the same way it covers other medical problems.

“We’re proposing zero percent increase,” Mike Waterman, school district business services director, told school board trustees. “It’s obviously good news for the district, and great news for almost 700 employees on the plan.”

“That’s fantastic news,” Chair Andy Willett said, just before the board voted 6-0 to approve employee health insurance rates that will cost the same as last school year.

When employees negotiate new union contracts, they often complain that the pay raises they win are wiped out by increases in health insurance costs, Waterman said. But that won’t happen this year.

What’s the secret to zero rate increases?

Waterman said one factor is that the school district is self-insured. The school district collects all the monthly payments from each covered employee, plus the district’s matching contributions, invests all the money and from that pool it pays each health claim. It hires Blue Cross Blue Shield just to pay out claims from the school districts’ fund.

“We’re in charge of how … it’s structured,” Waterman said. “We had a pretty good claims year — we were under budget.”

The school district also has a wellness plan. This year it’s focused on getting staff and spouses to participate in annual preventative checkups with MDLive, which offers virtual doctor visits, Waterman said. The goal is to help people identify problems early and hold down costs. The financial incentive to participate is being increased by $50 to $300.

Up to now, the school district has avoided covering mental health costs on a par with other health costs, even though the federal Affordable Care Act required it. The district took advantage of federal law allowing it to “grandfather” in its existing policies.

However, consultant PayneWest said grandfathering may not be allowed under Montana law, so to be conservative and to offer employees the best coverage, mental health will now be covered in the same way as other medical expenses. The costs are already incorporated into the monthly price tags.

Even though individuals won’t see their monthly charges increase, the school district as a whole expects to pay about $180,000 more next year, to cover 20 additional employees it plans to hire.

The school district received bids from six insurers interested in administering the insurance payments. Blue Cross Blue Shield of Montana was again the low bidder. It also offered the largest network, deepest claims discounts, largest out-of-state network and most progressive cost containment strategies, school officials wrote.

Mutual of Omaha offered the lowest of four bids for life and disability insurance. TMS RE offered the lowest cost “excess risk” coverage, which would kick in if an individual claim exceeds $225,000 a year or the entire plan exceeds 125% of expected claims.

The monthly rates that a single employee will pay, starting Sept. 1, will be $831 for the “traditional” $1,500 deductible plan; $693 for the $2,700 deductible plan; $567 for the $5,000 deductible plan; and $530 for the $6,750 deductible plan. Costs increase for employees with spouses and children. The dental and vision coverage are separate.

Gail Schontzler can be reached at or 406-582-2633. Follow her on Twitter @gailnews.

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