2012 AASBO Summer Conference
Insurance Pools as an Option in the Quest To
Purchase Health Insurance Effectively
Bill Munch, VSMG
bmunch@vsit.org
Ken Carter, Paradise Valley USD
kecarter@pvschools.net
“The Fellowship of AASBO”
Background/Overview
How Insurance Services and Products Can Be Acquired
 Two Methods for Acquiring Insurance
 Individually utilizing complex public procurement rules via an RFP process
 Join insurance pool and have pool acquire on your behalf
 There are currently 23 insurance pools operating in Arizona
 An insurance pool may purchase using the RFP process
 An insurance pool is exempt from the procurement rules when formed under
ARS 11-952.01(F) and has more flexibility when they acquire insurance services and
products and therefore is able to negotiate more lucrative contracts for its members
 Continuous negotiations on price and services
 Continuous evaluation of performance
 Able to enter into long term contracts/relationships
 Eliminates protests and unintended bid rejections
 Reduced administrative costs
 Pools also offer the advantage of more negotiating power due to aggregation of members
Background/Overview
How Insurance Services and Products Can Be Acquired
 An insurance pool can be created by forming by a intergovernmental agreement (IGA) with no other
purpose than to save districts money through the group purchasing of services. The concept is simple –
you should get better pricing and broader services as a group than you can individually.
 The insurance pool may be formed under ARS 11-952, 11-952.01,15-382 and would be specifically
exempt from procurement law by Arizona statute. No RFP would be necessary to join. By forming
under these statues the pool itself would be regulated through the Department of Insurance.
 An employee benefits pool would not be an insurance carrier or vendor. It is instead a way to purchase
insurance cooperatively.
 In addition to being examined by the Department of insurance as with any insurance company, the
pool would also be subject to be independently audited every year.
Background/Overview
How Insurance Services and Products Can Be Acquired
How can the purchase of health insurance be exempt from the procurement rules?

Arizona law permits two or more public agencies to enter into contracts or agreements
to jointly purchase various types of insurance, and health benefits plan insurance and
related services and to pool retentions of their risks for life insurance, disability, or
health claims made against any public agency within the pool and to do so on
cooperative or contract basis or by the execution of a trust agreement directly by the
agencies or by contracting with a third party.

A.R.S. 11-952.01(F) explicitly provides that any pool established pursuant to this section
is exempt from the provisions of the Arizona Procurement Code when purchasing
insurance, reinsurance or retaining certain consultants and professional services.
Background/Overview
How Insurance Services and Products Can Be Acquired
Benefits of Self-Insurance within an Health Insurance Pool:
 Each insurance pool determines its own benefits, vendors, and plans however it chooses.
 Due to purchasing size, a pooled plan may help your district purchase the following services at a
lower cost: Medical (provider network access & claims administration), Pharmacy Benefit Services,
Stop Loss Insurance, Dental, Vision, Life, COBRA, FSA, STD, and other employee benefits for those
participating in the pool. You get the benefits of economies of scale, negotiating power and knowledge
of true costs.

Health insurance pools can be specifically exempt from procurement law by Arizona statute
(ARS 11-952, 11- 952.01, 15-382).
 Health insurance pools may contract directly with providers, allowing for best in class vendors, and
preferred pricing.
 The pool can be proactive in continually evaluating and negotiating all contracts, at all times. There
are no “bid cycles”. It is similar to a never-ending best and final process.
Services Provided by a Health Insurance Pool
Coordinate the following Vendors
 Nurse Case Management (NCM)
 Company Nurse Program
 Physical Therapy
 Occupational Clinics
 Bill Review/Provider Network
 Independent Medical Examinations (IME)
 Physician Specialists
 RX Program
Services Provided by a Health Insurance Pool
Compliance, Accounting, Consultation and Administrative Support
 Health claims payments and TPA
 Pharmacy Benefit Management (PBM)
 Utilization management
 Disease management
 Nationwide Network of Contracted Providers
 Comprehensive Online Management System
 Online continuous (all year) employee benefits and enrollment system
Services Provided by a Health Insurance Pool
Compliance, Accounting, Consultation and Administrative Support (cont’d)
 Overall plan administration by the insurance pool
 Experience, trend calculation and rate setting
 Accounting, billing and support
 Summary Plan Documents (SPD’s)
 Consultative partner on State and Federal compliance (Health Care Reform)
 Complete appeal process management
Services Provided by a Health Insurance Pool
Compliance, Accounting, Consultation and Administrative Support (cont’d)
 COBRA administration
 403 and 457 compliance
 GASB 45 OPEB actuarial audit
 FSA administration
 Stop Loss insurance and reinsurance
 Comprehensive online management system
 Coordinate regular periodic claims audits
Services Provided by a Health Insurance Pool
Wellness
 Wellness programs strategic recommendations; target goals, schedule
committee interaction, communications
 Wellness programs that are data driven and targeted to achieve savings and
improved health
 Coordinate guest speakers, health classes and other available wellness events
 Provide regular health and wellness newsletters and emails for members
 Incentive programs and web site
 Program utilization evaluation and return on investment analysis
Services Provided by a Health Insurance Pool
Reporting and Regulatory
 Monthly, Quarterly and Annual Reports needed to analyze the financial and
clinical performance of your plans
 Monthly claims experience reports
 Quarterly financial statements
 Annual clinical management, utilization trends and plan year recommendations
 Annual benchmark analysis, industry trend and pool specific
 Annual renewal development and recommendations
Questions and Discussion Points…
Joining an insurance pool is another
cooperative purchasing option
available to school districts in the never
ending quest to obtain the best value
for your purchasing dollar.