The (Adrian) Daily Telegram reports that custodians and maintenance workers in the Adrian school district are switching to a high-deductible health plan with a health savings account. The Blissfield, Madison and Onsted districts already provide these types of plans to some employees, as does Northwest Community Schools near Jackson.
This good news for the district and for the 15 employees covered by the new plan: each employee will save more than $1,100 per year and the district will save about $17,500 annually. Additionally, since the premiums from these high-deductible, consumer-drive plans increase at a much slower rate than conventional coverage, these savings will likely increase over time.
The Mackinac Center has estimated that statewide schools could save $451 million annually by switching all employees from the conventional low-deductible insurance coverage to HSAs. Given faster rate increases on those conventional plans, over 10 years the savings would amount to $26 billion.
School employees would also come out ahead. Under these plans, districts deposit funds into a health savings account on behalf of each employee. The money stays with the employee, even if he or she changes jobs, and contributions, earned interest and health expense withdrawals are all tax-free. The money can be used to pay any qualified medical expense, and after the employee turns 65, can be used for anything, just like a traditional IRA.