Isle of Wight County Schools Joins The Local Choice Insurance Pool

Isle of Wight County Schools (IWCS) will join The Local Choice, a state-formed insurance pool for local government entities, alongside Smithfield and the county government. The School Board unanimously approved this decision on April 2, slated for implementation starting July 1. Currently, IWCS operates a self-insurance model to address medical claims. After issuing a request for proposals in January and receiving bids by February 13, the division reviewed options from Anthem, who manages their existing plan, and The Local Choice. Liesl DeVary, Chief Financial Officer of IWCS, highlighted that continuing with Anthem's self-insurance would impose an additional $1 million in health insurance costs beyond the anticipated budget for the 2026-27 school year. The Local Choice was created by the Virginia General Assembly in 1989, launching in 1990 to offer health insurance coverage to over 70,000 members, encompassing municipal employees, retirees, and dependents across 430 political subdivisions. The program is managed by the Virginia Department of Human Resources. Laura Sullivan, IWCS Human Resources Director, stated that Anthem will remain the insurance carrier under The Local Choice. She emphasized the advantages of the pooled insurance model, which promises more predictable and stable costs compared to self-insurance. This model reduces financial risks by leveraging the bargaining power of 70,000 members, potentially leading to favorable renewal negotiations. Currently, IWCS provides separate premium plans for health, dental, and vision insurance. Under The Local Choice, these plans will consolidate into a single premium. Sullivan pointed out potential challenges, such as employees adjusting to non-comparable plans after four years with comparable Anthem options. The transition will take place during an open enrollment period from May 1 to 15. The shift to The Local Choice will affect high-deductible plan offerings. The self-insured model previously allowed IWCS to set deductibles below IRS minimums, but participation in a pooled plan requires compliance with IRS regulations, leading to increased deductibles. For high-deductible plans, out-of-pocket maximums after meeting the deductible will increase to $5,000 for individuals and $10,000 for family coverage, up from the previous $4,000 and $8,000 under the self-insured setup.