Self-Insurance Fund & Benefits FAQ
Below is a list of frequently asked questions designed to provide information to employees regarding our insurance rates, plan design, and self-insurance fund.
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What does it mean to be self-funded?
FCPS uses a self-insurance model, which means healthcare claims are paid directly from our shared health fund, which is supported by both FCPS and employee contributions. The companies that you use for benefits (CareFirst, CVS, Delta Dental as an example) are our partners who handle the day-to-day operations that make the plan work.
Most public school systems are self-insured or self funded. This means that employee medical claims are paid by the
employer directly to an insurance carrier. FCPS must set aside funds to cover claims as they occur. This option offers
the ability to tailor our health plan to meet the specific needs instead of using a one-size-fits-all approach. Additionally, if
claims are lower than expected, FCPS can contribute the savings to the health plan reserve. If claims are higher, FCPS is
required to pay the difference.
If FCPS is self-insured, what role do companies like CareFirst, Delta Dental, and CVS Caremark play?
Even though FCPS is self-insured, you’ll still see names like CareFirst, Delta Dental, and CVS Caremark on your insurance
cards. That’s because they administer the plan, but when you pay your insurance premiums as part of your paycheck,
you are paying into the fund, not paying them directly. The easiest way to understand it is this: they administer the plan,
but they do not determine the plan design. What they don’t do is take on the financial risk. Unlike a traditional insurance
model, there isn’t an outside company absorbing the cost of care, that responsibility stays with the FCPS health fund.
So while these organizations play an important role in administering the plan, the funding, and the responsibility for
managing costs over time, remains with us.
Who makes decisions about benefit costs and plan design?
Changes to health plans are made through a collaborative process that includes FCPS and association leadership. This
group, called “The Insurance Council,” meets monthly throughout the year to review the health of the fund, claims costs,
and receive reports from an outside consultant who is an expert on health insurance plan design. The Insurance Council
works together to: 1) Review cost data and trends, 2) Consider plan design changes or benefit offerings, 3) Balance
competing priorities (cost, coverage, stability).
What responsibility does the Insurance Council have when making decisions about the health plan?
The primary role of the Insurance Council is to act with fiduciary responsibility. This means the Council is ethically
obligated to manage the self-insurance fund with the highest standard of care, ensuring that all financial decisions are made in the best interest of the employees and the long-term health of the plan. Exercising stewardship to monitor the
fund’s financial integrity is at the forefront of the Council’s mission, ensuring there are always sufficient assets to pay
employee claims. By acting as a guardian of the fund, the Insurance Council makes recommendations to the Board that
will preserve the long-term viability and financial integrity of our healthcare program. This collective commitment is a
promise that the plan will remain solvent, reliable, and capable of honoring its obligations to every member, both now
and in the years to come.
How much say do the associations have in decisions about premiums and plan
changes?
Health plan changes like premiums and plan design are part of the collaborative work of the Insurance Council, which
includes FCPS and association leadership. The association leaders work to represent employee interests, while helping
shape solutions that balance cost, coverage, and stability. Decisions must be made to keep the plan financially stable
and the options that are presented are ones that the Insurance Council identified were necessary to address the financial
realities of our health care plan.
What is the difference between premiums and plan design with our health
insurance?
Premiums are the cost employees and the Board of Education pay to provide health insurance coverage. The employee’s
portion of the premium is deducted from each paycheck. Plan design, on the other hand, determines what is covered by
the insurance and what employees pay when they actually access care. This includes things like copays for doctor visits,
deductibles, coinsurance, and what services are covered.
Why doesn’t FCPS just cover the increased costs?
FCPS continues to contribute a significant portion of the overall cost of the health plan.
However, covering all increases on the employer side would put pressure on the overall budget and require reductions in
other areas (including staffing or compensation). The goal is to balance affordability today with long-term sustainability.
If the health plan has reserves, why can’t we use those instead of increasing
premiums or changing the plan?
Reserves are there to protect the plan, not replace ongoing funding. Reserves act as a financial safety net to cover
unexpected high-cost claims, protect against sudden spikes in expenses, and ensure claims can always be paid. This
helps keep the plan stable, especially in unpredictable years.
Importantly, using reserves to fund recurring operational costs (such as annual premium increases or rising medical
costs) is not recommended and is not a fiscally sound practice. Because healthcare costs rise every year, using one-time
reserve funds to “subsidize” those increases creates a structural deficit. This approach would quickly deplete the safety
net, leaving the plan vulnerable to insolvency and eventually requiring much larger, more disruptive “catch-up” increases
for employees in the future. Maintaining the reserves ensures the fund remains healthy enough to honor its promises to
every employee, both today and in the long term.
Why does it seem like employees are taking on a bigger share of the cost?
It’s completely understandable to feel that any change that affects your paycheck or out-of-pocket costs is personal.
What’s important to know is that these decisions are not about shifting costs away from FCPS. They are about keeping the
health plan financially stable over time.
Healthcare costs have increased significantly, and because FCPS is self-insured, those increases are paid directly from
our shared fund. To keep that fund healthy and avoid much larger increases later, adjustments are sometimes necessary
on both the employer and employee side.
Why are health care costs going up?
Healthcare costs are influenced by things like rising hospital and provider prices, medication or prescription costs,
increased use of services, and high-cost or complex medical cases. Your healthcare costs, including premiums, based on
actual medical claims and trends within the plan. As FCPS is a self-insured organization, we experience those increased
healthcare costs directly.
If my premium is going up 13% and my pay raise is smaller than that, doesn’t that
mean I’m losing money?
A percentage increase in premiums and a percentage increase in salary are not applied to the same amount. Your salary
increase is applied to your total earnings, while a premium increase is applied only to the portion you pay for healthcare.
So, even if the premium percentage is higher, it doesn’t mean it has the same overall financial impact as your raise. They
are both percentages, but they are percentages of two very different numbers; your full salary versus just your share of
the premium.
For example, a 3% raise on a $60,000 salary is $1800. A 13% increase on a $200 monthly premium is about $26 more per
month. Both matter, but they are calculated on very different bases so you can get a raise, but not all of your raise will
necessarily be shifted to increased premium costs.
Could these changes have been avoided?
No. In the short term, some changes can be delayed. If medical costs continue to rise without adjustment, the fund
becomes less stable and future increases tend to be larger and more abrupt. In most cases, making smaller, planned
adjustments now helps avoid more significant disruption later.
What happens if the fund doesn’t have enough money to pay for a very expensive
medical claim?
We protect the fund and our employees by purchasing stop-loss insurance. This acts as a financial safety net that
reimburses the fund if an individual’s claims exceed a certain dollar amount or if the group’s total claims are
unexpectedly high. This ensures the plan remains solvent even during catastrophic events.
What is being done to control costs overall?
In addition to plan adjustments, FCPS works to manage costs by partnering with our providers, such as CareFirst, to
negotiate rates, monitoring high-cost claims and trends, and to explore plan options that encourage cost-effective care.
This is a continuous effort, not just something addressed during plan changes.
What’s the goal moving forward?
The goal is to maintain strong reliable coverage; keep the plan financially stable; avoid sudden, large increases; and share
responsibility in a way that is as fair and predictable as possible.
Will these changes make it harder for me to see my doctor or get my claims paid?
There is no fundamental change to your daily experience. While there are plan design changes, there is no change in
our third-party administrators. CareFirst, CVS Caremark and Delta Dental will remain a constant in the 2027 plan year.
How do our benefits compare to other organizations?
Even with these changes, our overall cost-sharing and employer contribution remain more favorable than many public
and private sector plans. That doesn’t make increases easy, but it does reflect a continued commitment to strong benefits.
How can I manage the impact of these changes on my budget?
While both FCPS and employees are seeing an increase in healthcare costs, we encourage staff to utilize Flexible
Spending Accounts (FSAs) to help mitigate those expenses. An FSA is a powerful tool for creating financial predictability.
By setting aside money directly from your paycheck on a pre-tax basis, you reduce your overall taxable income. More
information on the FSA benefits offered by FCPS may be viewed by visiting the Benefits section.
Why consider a Flexible Spending Account (FSA)?
You can use your FSA funds to pay for out-of-pocket costs like deductibles, co-pays, and prescriptions. It essentially
allows you to pay for these medical necessities using “tax-free” dollars. You decide the amount to contribute to your FSA
based on your expected needs, and that amount is spread evenly across your paychecks throughout the year. You can set
this up through PeopleSoft during Open Enrollment each year for the next year.
For a Medical FSA, your full annual election is available to you on July 1, even before you have fully contributed the funds
through your payroll deductions. This is particularly helpful for meeting deductibles early in the plan year. You don’t
have to worry about losing every penny if you don’t spend it. For the 2026 plan year, you can carry over up to $680 in
unused healthcare FSA funds into the next year. This adds a layer of safety and flexibility to your planning.