Norwalk teacher health insurance costs rise 33%, adding milli ...

NORWALK, Conn. — A sharp increase in health insurance costs for Norwalk teachers is emerging as one of the largest pressures on the city’s proposed school budget, adding millions of dollars in unexpected expenses.

School officials say the renewal rate for the Cigna health plan used by members of the Norwalk Federation of Teachers (NFT) is projected to increase by about 33% for the upcoming fiscal year, far higher than the roughly 15% increase originally anticipated when the budget was prepared.

“This higher-than-anticipated increase results in approximately $3.4 million in additional employer premium costs beyond what was budgeted,” said Lunda Asmani, chief financial planning officer for Norwalk Public Schools, in a statement explaining the increase.

The higher renewal rate would also raise employee premium contributions, estimated at about $1,000 annually for employee-only coverage, $2,000 for employee-plus-one coverage, and $3,000 for family coverage, according to the district.

Connecticut Partnership Plan: Key details

The Connecticut Partnership Plan is a traditional health insurance plan used by many public employees. It generally has lower deductibles and more predictable copays than high-deductible plans, though premiums are typically higher.

Deductible: $350 for individuals and $1,400 for families when using in-network providers.
Out-of-pocket maximum: $2,000 per individual and $4,000 per family for medical costs.
Preventive care: Covered without cost sharing.
Primary care visits: Often covered with no charge through preferred providers or with a small copay.
Emergency room visits: $250 copay per visit, waived if the patient is admitted.

After the deductible is met, many services are covered with coinsurance — typically about 20% of the cost when using in-network providers.

The plan uses a provider network, meaning patients generally pay less when they receive care from doctors and hospitals in the network.

Source: Connecticut Partnership Plan Summary of Benefits and Coverage. View plan summary

How teachers left the state insurance plan

Members of the NFT moved to the Cigna high-deductible plan in 2023 following contract negotiations with the Board of Education (BOE).

According to a district press release at the time, the union proposed leaving the Connecticut State Partnership Plan during collective bargaining for the teachers’ contract that took effect Sept. 1, 2023.

Summary of Benefits Connecticut State Partnership Plan

CT partnership plan SBC 2018 (final)Download

The BOE then conducted a request for proposals for high-deductible insurance plans, which officials said could potentially reduce healthcare costs.

The proposal was shared with the district’s other bargaining units, but all other unions declined to adopt the high-deductible option, according to the district.

After those unions opted to remain in the state plan, teachers requested additional negotiations with the BOE.

During those talks, the union asked the district to seek state approval to allow teachers to leave the State Partnership Plan while other bargaining units remained in it.

State officials approved the request, allowing Norwalk teachers to move to a separate high-deductible health plan administered by Cigna, while other school employees and city workers continued to participate in the state insurance pool.

High-deductible health plans typically offer lower monthly premiums but higher upfront costs when medical care is needed. Under these plans, patients usually pay the full cost of most medical services until they reach the deductible, after which the insurance plan begins sharing costs.

How the plans differ

The Connecticut Partnership Plan summary is publicly available on the State of Connecticut website, but a full summary of benefits for the teachers’ Cigna plan was not immediately available for comparison.

Officials with the Connecticut Insurance Department say the state partnership plan generally provides broader benefits than typical high-deductible plans.

“The state partnership plans typically don’t have a deductible unless you don’t complete the preventive requirements,” a department representative said, explaining that even then, the deductible is relatively small — usually around $300.

Federal guidelines define high-deductible health plans as those with deductibles of at least $1,650 for individual coverage or $3,300 for family coverage, meaning patients must pay significantly more out of pocket before insurance coverage begins.

Under the Cigna plan, teachers face deductibles of about $2,000 for individual coverage and $4,000 for family coverage, according to NFT President Mary Yordon, though the district contributes to employees’ Health Savings Accounts to offset part of those costs.

In comparison, the state partnership plan generally offers “richer benefits,” according to the Connecticut Insurance Department.

The Connecticut Partnership Plan includes lower deductibles and fixed copays for many services. Primary care visits, for example, typically require about a $15 copay, with preventive care covered at no cost for in-network providers.

Prescription drugs under the state plan also have relatively low copays, ranging from $5 to $10 for generic medications.

Why teachers switched plans

Union leaders say the move away from the state partnership plan was originally intended to reduce costs for both teachers and the district.

What is a high-deductible health plan?

A high-deductible health plan, or HDHP, usually has lower monthly premiums but higher out-of-pocket costs before insurance starts sharing more of the bill.

In general, an HDHP works in stages:

You pay the full cost of most non-preventive care until you reach the deductible.
After that, you and the plan usually split costs through coinsurance or copays.
Once you hit the plan’s out-of-pocket maximum, the plan pays 100% of covered in-network costs for the rest of the year.

Preventive care is typically covered before the deductible when members use in-network providers. That often includes annual checkups, certain vaccines, and some screenings.

HDHPs are often paired with a Health Savings Account (HSA), which allows people to set aside money for medical expenses using tax advantages.

Who it may work well for

People who are generally healthy and do not expect frequent medical care
People who want lower monthly premiums
People who can afford higher upfront costs if care is needed

Who may struggle with it

People who expect high medical costs each year
People who want more predictable copays for visits and prescriptions
People who may have difficulty covering large upfront expenses

Source: Cigna Knowledge Center – High Deductible Health Plan Pros and Cons

“Our members were experiencing great financial stress on the state partnership plan.”
Norwalk Federation of Teachers President, Mary Yordon

She said the lower premiums helped reduce teachers’ payroll deductions while still maintaining strong benefits.

Yordon said the trade-offs between premiums and deductibles were part of the union’s analysis when the district switched plans.

“The lower premium share cost counterbalanced the high deductible,” she said.

Yordon added that once a member meets the deductible, the Cigna plan may cover a larger share of in-network care.

According to Yordon, the district saved roughly $4.5 million in the first year after teachers moved to the Cigna plan.

District considering return to state plan

With the Cigna plan now projected to increase far more than expected, school officials are evaluating whether to move teachers back into the state partnership system.

Asmani said doing so could reduce the projected increase in healthcare spending from about $6.5 million to roughly $3.1 million, bringing costs closer to the originally budgeted amount.

“Any change of this nature would require reopening the collective bargaining agreement and would only proceed through mutual agreement between the Board of Education and the Norwalk Federation of Teachers,” Asmani said.

Yordon said the union is open to reviewing the proposal.

“If it turns out that the state partnership plan can maintain our excellent benefits and save dollars, we are interested in looking at it”
Norwalk Federation of Teachers President, Mary Yordon

Rising costs across school districts

Health insurance costs are increasing for school districts across the region, according to Michael Morton, a Connecticut education finance analyst with the School+State Finance Project.

“It’s a widely seen issue,” Morton said. “I have yet to encounter a district that is not experiencing rising healthcare costs.”

Morton said personnel costs — particularly salaries and benefits — typically make up the largest share of school spending.

“That’s typically what the biggest costs are — salaries and benefits,” he said.