By Jennifer Eisenbart
Editor
When Burlington Area School District was first dealing with the provisions of Act 10 in the spring of 2011, administrators chose to go with a less expensive health insurance option – and not ask employees to pay toward their premiums.
The reasoning was that district employees were already facing paying toward their own retirement plans for the first time, and avoiding a premium contribution was a way of easing into the transition.
But as costs have risen over the last five years, so has the financial burden falling on the shoulders of district employees. And while the district is still looking at avoiding premium contributions for the 2016-17 school year, costs look to be going up again.
Due to a number of high-cost users on the insurance plan, the district was initially looking at a more than 30 percent increase from the WEA trust. BASD’s insurance agent, M3, negotiated that increase down to 16.9 percent, and solicited bids from other companies.
Those companies, however, declined to get involved. M3’s recommendation Monday night at the School Board Finance Committee was an option that would take the high-deductible plans to a maximum out-of-pocket cost of $4,000 for a single user and $8,000 for families, but keep co-pays at zero for those on the plan.
The district had budgeted for a 5 percent increase in costs this year, but M3 is recommending taking that to a 7.4 percent increase and going with the suggested option.
The presentation by Jeff Ireland was recorded and sent to the district and School Board before Monday night’s meeting. Ireland outlined three options, the other two involving keeping the deductible at $3,000 and $5,000 but requiring co-pays.
The buy-up option would still be available to employees, at the cost of $18.16 per month for a single member and $50.60 per month for families.
But board members asked the district to go back and explore two other possible options with M3. Phil Ketterhagen suggested the first option – keeping plan costs the same as last year, but making life, dental and long-term disability insurance optional and an out-of-pocket cost for employees.
“This is a trade-off I think is logical,” Ketterhagen explained, adding that the increase in the budget would be 7.1 percent versus the 7.4 percent M3 suggested.
Board member Kevin Bird, meanwhile, offered a potentially riskier alternative. He suggested going with a higher deductible – say $5,000 for individuals and $10,000 for families – and putting the premium savings into a health savings account.
That money could be used to pay the difference in the out-of-pocket costs between this year’s numbers and next year’s. In simple terms, if a person goes over the $3,000 out-of-pocket cost, the district would cover the extra $2,000 through the health savings, and the same with family plans.
That would potentially allow the district to save money, but BASD Business Administrator Ruth Schenning estimated that no more than 35 percent of employees could use the savings funds or the district would not see savings.
Bird also suggested surveying staff to find out how many spouses are using the district’s insurance, and possibly require spouses to use their employer’s health insurance when it is available.
That idea was met with some resistance, however, due to unattractive plans at some companies and the current job market.
The district is looking at staying with Delta Dental for dental insurance, but becoming self-funded. Employees would receive a maximum of $1,500 in benefits each year, with the district paying the premium cost.
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