Staff has choice of high deductible or premium contribution
By Jennifer Eisenbart
Staff writer
After battling for more than eight months trying to explain its position in not asking employees to pay a portion of their health insurance premiums, the writing may have been on the wall Monday night when the Burlington Area School District personnel committee began its discussion of benefits for next school year.
And yet, for all the discussion ahead of time, not even the two new school board members could agree Monday night on what would constitute proper cost-sharing.
In the end, after a lengthy discussion, the finance committee recommended Assistant Superintendent Peter Smet move forward with a two-tier option for health insurance for the 2012-13 school year.
The two tiers would be: a high-deductible health plan (HDHP) that would have deductibles of $1,500 for single coverage and $3,000 for family (increased to $3,000 and $6,000 for out-of-network visits) with a health-savings account plan attached, and the current plan with deductibles of $250 single and $500 family, with a cap of out-of-pocket expenses at $1,000 for single and $2,000 for family and with co-pays for various office visits.
The catch: the district will pay the full premium for those taking the HDHP plan, but those wanting to go with the lower deductible plan will have to pay the premium difference between the two – $60.53 for single coverage and $169.48 for family, per month.
The total health insurance cost to the district will be about $4.8 million, though final numbers will depend on the employees in the district and whether they take single or family coverage. That is a savings over the current year of roughly $450,000 – which Smet said was how he had figured insurance costs into the budget.
Committee support
The Personnel Committee of William Campbell, Larry Anderson and Scott Barrett voted 3-0 to approve the change in the insurance, allowing Smet to move forward with notifying staff of the changes. A quick straw poll of the board – which was fully in attendance – showed a 5-1 support for the new insurance. Rosanne Hahn would not offer an opinion because she takes the insurance, and the no vote came from new board member Roger Koldeway.
The employee contribution for the second plan comes to roughly 12.6 percent of the premium cost – something School Board President David Thompson said district residents had been, in large part, calling for.
“There is a public perception that we are not doing what we need to do,” Thompson said. “The most common question I get is why don’t we have any premium contribution?
“No matter how much we try to educate the public, it doesn’t seem to matter,” he added.
The district heard a great deal of criticism last year when, in spite of switching to Humana and saving more than $1 million in insurance costs, it did not ask employees to pay a portion of their premiums – as required by Act 10 if the district had used the WEA Trust insurance.
That issue was one of the key turning points in two School Board members being bounced out of office in April and replaced by Koldeway and Phil Ketterhagen. Both vowed that they would work to see the district follow sterner cost-control measures.
However, not even the two newly elected officials could agree on what constituted a fair contribution by teachers. Ketterhagen indicated that he was fine with the two-tier option, while Koldeway wanted to see employees paying part of their premiums even with the high deductible, health-savings plan.
After the two verbally batted the issue around, Ketterhagen jokingly invited Koldeway to settle their differences in the parking lot outside after – and the two agreed to disagree.
The school district initially received bids from Humana – the current provider – that would have resulted in an increase in costs of $1.1 million for staying with the same plan, the district asked insurance provider Hausmann Johnson to search for other competitive prices.
Insurance agent Dan Martin attended the committee meeting Monday to present those options, but also came forth with a revised quote from Humana – the one that the district ended up pursuing.
“They didn’t want to lose the district’s business,” said Martin.
Martin’s 11-page report offered different quotes ranging from the current plan to the HDHP, from Humana to United Health Care.
Estimates made
Smet said during the presentation that, for the sake of working out the preliminary budget numbers for salaries and benefits, that he decided to go with the HDHP plan.
That laid the way for the two-prong approach that ended up being recommended. However, discussion still ran heated on whether employees needed to pay portions of the premium – and whether the HDHP would do enough to discourage unnecessary use of the plan.
Ketterhagen seemed amicable to the two-tier approach, saying the higher deductible plan could be sold to his supporters as employees paying more, as could the lower deductible (but paying the difference between them) plan.
“It might be the educational impetus we need,” he said.
Koldeway deferred, saying, “I don’t think there’s a problem asking people to pay some contribution.”
In the end, the discussion struck something that Smet had been preaching throughout the winter and spring – balance.
“It’s a budget of many compromises,” he said. “This is just more of the compromises we discussed.
“Like any compromise, not everyone is going to be happy.”
The discussion went on a bit longer in contemplating dental coverage – another roughly $387,000 in costs to the district. Koldeway again wanted to see employees paying part of the premium, while other board members questioned how far into the pockets of the district staff they could dig.
In the end, the personnel committee recommended leaving the dental coverage as is.
Salaries discussed
In the Finance Committee that preceded the personnel meeting, Smet also outlined the expected rough draft of numbers for salaries and benefits for both Fund 10 (regular) staff and Fund 27 (special education) staff.
In addition to the rough draft of health care costs, Smet figured in $15.62 million in salaries for the Fund 10 staff and another $3.75 million for Fund 27 staff.
With contracts still being negotiated, Smet figured a 2 percent increase in wages just for estimation purposes.
Ketterhagen and Koldeway also questioned whether the district needed to continue paying out cash in lieu of taking family health insurance through the district, saying the practice was outdated and unnecessary.
The board agreed that more study needed to be done on those numbers to find out what the district was paying.
“There’s some choices there,” said Ketterhagen.
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