The Dubious Requirement of Uniform Coverage for MESSA PAK Plans

One way school districts hope to minimize costs is by having employees themselves request the quantity of insurance they need. For example, school districts would incur needless costs if a family of two somehow received full-family coverage rather than two-person coverage. This is why many school districts are bothered that MESSA requires uniform coverage for participants in the MESSA PAK program. They are worried that MESSA is generating excess costs by forcing employees with varying insurance needs to subscribe to a uniform level of coverage.

The MESSA PAK program allows school districts to purchase several forms of insurance coverage from MESSA in one convenient package. Rather than purchase dental insurance from one carrier, disability insurance from another carrier, and health insurance from yet another, MESSA can combine all of these coverages into one purchase. But with the MESSA PAK program, MESSA requires uniform coverage of an employee group subscribing to a particular insurance package. This "true group requirement" mandates that every member of an employee group be covered by the same policy, with the same premiums paid for every employee in the group. Even if some employees have no need or use for all of the coverage provided by MESSA PAK, they must subscribe to it all as part of a uniform employee group. The true group requirement makes the cost of coverage more expensive than necessary, because school districts pay premiums for some employees who may never utilize certain benefits.

Suppose, for example, that a school district negotiated a MESSA PAK plan consisting of health, vision, and dental coverage into its collective bargaining agreement. The district would have to pay a fixed amount of premium per employee for MESSA PAK, even though many employees of the district will end up with duplicate coverage. An employee may receive dental and vision coverage under the MESSA PAK plan, but that same employee may also receive similar dental and vision coverage from a spouse's insurance plan. Concurrent coverage is neither necessary nor efficient, and amounts to a waste of money.

While most insurance companies will allow a customer to design a health insurance package by choosing between specific riders, MESSA does not allow its customer school districts to do this. This type of health care option, often known as a cafeteria plan, would inevitably reduce the cost of insurance, since each district or district employee could design a benefit package in accordance with their individual needs. But since MESSA will not allow this, customer school districts must choose between some of the most expensive, confined, and comprehensive insurance plans available in the state.