Clark County School District sued as it moves to consolidate employee health insurance

Clark County School District officials on a quest for one health plan to serve all 30,000 employees on Monday received a consultant’s $158,350 analysis on how to leverage its status as the state’s largest employer.

But a lawsuit filed May 29 in District Court may throw a wrench into the works.

Business Benefits Inc, the school district’s existing health plan negotiator, alleges the district and a single School Board member, President Erin Cranor, wrongfully terminated its contract, not paying for services rendered.

Cranor is accused of meddling on her own without School Board approval, requesting in an Oct. 14, 2013, email to Superintendent Pat Skorkowsky that the district sever its contract with Business Benefits “as soon as possible” and pursue a district-wide health plan.

The district currently provides health insurance for its 11,000 school support staff and about 150 police officers. It also pays labor unions to provide insurance for its 1,300 school administrators and 18,000 teachers.

The Clark County Education Association, which represents teachers, agreed to pay half the cost of Monday’s analysis. It has had “struggles in the past few years” to pay claims through its Teachers Health Trust, Skorkowsky said.

Under pressure from Cranor, Skorkowsky canceled the district’s contract with Business Benefits on Dec. 31, 2013.

“It appears there may be intent to continue to the current contract with the broker (Business Benefits), even though the contract is now known to be unfavorable to the district,” Cranor wrote in the email to Skorkowsky obtained by the Review-Journal.

But the School District sent its contract termination notice on the last day of the contract term. There needs to be 180 days notice from the end of the contract. The district said the termination would be effective 180 days later, on June 30.

However, the length of Business Benefits’ contract is tied to the health plans it negotiated with Health Plan of Nevada, which don’t expire until Dec. 31, 2016.

The lawsuit claims the district’s attempt to terminate the contract “effectively denies” Business Benefits for services rendered.

“Despite that Cranor knew (or should have known) that the contract could not be terminated for convenience,” she advocated without authority from her fellow board members that the district “terminate the contract without cause,” according to the lawsuit.

If the school district wanted to cancel its contract with Business Benefits, it needed to do so before June 30, 2013, providing the 180 days’ notice required from the end of contract on Dec. 31, 2013. However, the order from the district at that time was to negotiate a health plan and “fix” an emergency account that the district had wrongfully depleted, according to the lawsuit.