Lehighton Area School District approved distribution of a $722,901 refund last week from the Public School Health Insurance Cooperative after a positive claims year.

The district currently pays about $5.2 million into the PSHIC claims fund per year. If there are any excess funds at the end of the year, the district can get a refund to put in its general fund account or hold the money in an interest bearing account, which would then be put toward its PSHIC payments the following year.

This year the district is choosing the money and putting the money in the general fund, which will balance the budget.

“Last year we also chose reimbursement of 85% of the excess funds,” LASD Business Administrator Edward Rarick said. “We do hold 15% because there is still liability to the district that we have to be prepared for. There is a certain minimum we have to keep in the claims fund.”

The consortium is made up of school districts, municipalities and several colleges.

PSHIC does an 18-month analysis of insurance claims and the following year, the district pays a monthly rate based on those claims.

“We save money by being in the consortium because you pool the resources from all of these entities so you can get better health care at a reduced rate,” Rarick said. “This refund is because we have less catastrophic claims.”

That wasn’t always the case, however. The district had a few years with higher than average claims, leading to a higher monthly payment into PSHIC.

“I think we were punished a little bit because of a few bad years we had,” board President Joy Beers said. “When we re-entered the consortium, we looked like we would be a district using a lot of these funds.”

In 2016, the district’s claims totaled just under $4 million, followed by $3.4 million 2017. The district withdrew from the consortium in 2018 and 2019. In 2020, claims totaled $1.9 million.

“We’ve improved over the past few years,” Rarick. “Last year we had around six high claims. The most the district pays on any claim is around $72,000. If we were not in a consortium, we could have claims of several hundred thousand dollars.”

Director David Bradley, however, said he would like the district to reevaluate membership in the consortium.

“The consortium cost us millions of dollars to be a member because we have a very diligent and good district,” Bradley said. “So we’re getting these refunds because we are being charged more than we need to be.”

The board said it would take up any discussion on a consortium membership change at a later date.