The health insurance trust for Clark County School District teachers, THT Health, is set to repay its $35 million loan, freeing it from significant debt and improving its financial outlook.
Clark County School District’s Health Insurance Trust Repays $35 Million Loan
The health insurance trust for Clark County School District teachers and their families, known as THT Health, is set to repay its $35 million loan from the Clark County School District this summer. This repayment will free the trust from significant debt and improve its financial outlook.
( Credit to: Lasvegassun )
According to CEO Tom Zumtobel, THT Health will have approximately $5 million to $8 million in reserves after settling the debt in June. The ideal goal is to have enough funds to cover outstanding claims for services incurred but not yet reported, estimated to be around $30 million. THT Health aims to rebuild its reserves to that level within 12 to 18 months, depending on net income and monthly savings.
Despite the timeline, Zumtobel expressed confidence that THT Health is on track to fully repay the $35 million loan by its due date of June 30. The trust is committed to avoiding additional financial burden on teachers and has a $15 million line of credit available if necessary.
As of June, THT Health had approximately $20 million on hand towards the loan repayment. By January, this amount had increased to $40.6 million, with further growth projected. Monthly updates submitted between independent annual audits have been reliable and cause for optimism, according to the School District’s CFO.
THT Health’s Financial Outlook and Efforts to Improve Stability
The trust’s fiscal year ending in June 2023 audit revealed that THT Health had $32.3 million in net assets available for plan benefits and $73.6 million in payable and incurred claims. However, the trust still faces a class-action lawsuit alleging denial of coverage for certain health treatments, overcharging for copays, and exceeding out-of-pocket maximums. The case remains pending in federal court after being moved from Clark County District Court.
In the same audit, auditors expressed concerns about the trust’s ability to continue due to the district’s loan. However, with the repayment nearing completion, the trust’s financial outlook has improved. THT Health reported slightly lower revenues last year, attributed to fewer teachers enrolling in plans. It also made cuts to medical and administrative expenses, resulting in a net income of approximately $23 million, a significant improvement compared to the previous year.
To address previous inefficiencies, THT Health reduced its employee roster from around 40 to 17 individuals and streamlined vendors and consultants. The trust now operates with fewer than five executives, eliminating unnecessary high salaries.
School Board President Evelyn Garcia Morales acknowledged the efforts made by THT Health and the School District to rectify the situation. However, she expressed concerns about avoiding a similar predicament in the future.
THT Health’s Journey and Future Plans
THT Health, originally established 40 years ago by the Clark County Education Association teachers union, has taken significant steps to improve its financial stability. With the impending repayment of its $35 million loan, the trust is on track to regain solid footing and ensure the provision of quality health insurance for Clark County School District teachers and their dependents.
