Teachers’ health insurance trust pays off $35M loan from CCSD, looks to rebuild reserves
Clark County School Board trustees listen to public comment during a school board meeting at the CCSD Greer Education Center on East Flamingo Road Wednesday, March 6, 2024.
Saturday, July 6, 2024 | 2 a.m.
The health insurance trust for local teachers and their families is no longer indebted to the Clark County School District after paying off a $35 million loan that the district extended about three years ago to keep the trust from failing.
THT Health, the self-funded insurer that covers more than 30,000 CCSD teachers and their dependents, paid off the $35 million note in full June 26, four days before its due date, said CEO Tom Zumtobel. The district acknowledged receipt.
CCSD doesn’t oversee THT, formerly known as the Teachers Health Trust, but it has a significant vested interest since extending the interest-free taxpayer bailout in 2021. The district used the term “prepayment” when referring to the $35 million, and THT treated it as a loan.
Zumtobel, who took over the helm just before the trust accepted the loan, has said THT whittled its employee roster from about 40 people to 17, eliminating some unnecessary high salaries. It also streamlined vendors and consultants.
He added this week that while THT primarily managed costs “through administrative efficiency gains,” improved provider discounts and commitment by local providers to serve teachers significantly contributed to the trust’s recovery. When THT took the bailout, it had swollen administrative ranks, redundant vendor and consultant contracts, and a deep well of unpaid claims.
The debt had dragged down THT’s recent independent annual audits. In its most recent one, issued in December for the fiscal year ending in 2023, auditors issued a “substantial doubt about the trust’s ability to continue.”
But this bleak forecast rested heavily on the district’s loan. In a statement of assets and liabilities, THT had $36.4 million in liabilities, which included the $35 million loan.
With the debt now cleared, THT will continue to rebuild its reserves. In an update before the school board in March, Zumtobel said it’s ideal to have a $30 million cushion on hand to cover what it owes on claims for services that had been incurred but not yet reported. He said this week that it would take 24 to 36 months — two to three years — for THT to be “fully reserved.”
Zumtobel said THT would not charge teachers higher premiums this year.
“Thank you so much for the loan, or the prepayment, and investing in us and investing in your teachers,” Zumbotel told the school board at its June 27 meeting, a day after THT wired CCSD the money. “We did it through good operational financial management and accountability.”
The trust was created 40 years ago by the Clark County Education Association teachers union.
“The district recognizes the importance of health benefits to educators and will continue to ensure CCEA and THT Health are accountable for their obligation to provide appropriate services to teachers, licensed personnel and their families with the taxpayer funds provided to them,” the district said in a statement.
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