Escalating health insurance costs have forced county school
districts to change insurance plans offered to employees, who are
upset that they didn’t have time to research the switch.
Escalating health insurance costs have forced county school districts to change insurance plans offered to employees, who are upset that they didn’t have time to research the switch.
The San Benito County Schools Medical Insurance Group Joint Powers Authority, the collective bargaining unit for all county public schools, voted last week to change from HMO and Point-of-Service plans to self-funding plans to limit cost increases.
“We were looking at what we could do to mediate these costs,” said Jean Burns Slater, superintendent of the San Benito High School District and a board member of the Joint Powers Authority.
The JPA was looking at a 39-percent to 42-percent increase in the costs of health insurance plans, Slater said. The current rate for the HMO per employee is $530.06 per month and the POS plan is $571.46 per month. The two will increase to $740.81 and $798.67, respectively, for the next school year.
Instead, the JPA considered other options provided by Keenan Associates, an insurance broker.
The group chose an “HMO look-alike” self-funding option that is a PPO. This new plan is a 31.5-percent rate increase and will cost each employee $705.43 per month. The second option is a PPO self-funding plan that is a 9.98-percent increase and will cost $590.01.
School employees were angered because the JPA voted to change plans, and what plans to change to, at the same meeting. This allowed employees no time to research other options, according to Clete Bradford, SBHS teacher and SBHSD’s union representative.
“Did they open it up to other bids? … No,” Bradford said.
Bradford compared the actions to children being told what’s going to happen without being asked for input.
Self-funding means districts are responsible for claims made by plan holders – instead of an insurance company, like Blue Cross, having responsibility. Blue Cross will keep track of claims and file them, but the districts will be responsible for paying them.
The JPA used self-funding plans about a decade ago, but switched to HMO coverage in the 1990s when HMOs were popular, Slater said.
A self-funding plan does not allow for use of HMOs, so the JPA pursured a similar plan. That is why they approved the “HMO look-alike plan.”
“Most people are happy with HMOs,” Slater said.
When the county used self-funding plans, it saved money and compiled a reserve fund of about $1.5 million, Slater said.
However, Bradford said the self-funding plans can backfire when an employee has a big claim, such as needing an expensive surgery. Slater said there is insurance for a “large claims charge” for claims more than $100,000 for back-up.
The approved “HMO look-alike” plan has the same co-payments as the current HMO plan. The second option – the self-funding PPO – is a little more expensive for employees as far as deductibles and prescriptions are concerned.
One thing administrators said they need to stress to employees is responsible use of benefits.
“We need to provide incentives for people to self-regulate their health care,” said Tim Foley, county superintendent of schools who represents the seven smaller school district. “People need to be smart in how they use their insurance.”
For most employees, more money is paid than received. At the current rate, districts pay almost $6,000 per year to insure an employee. However, not many employees are using $6,000 worth of their insurance, Slater said.
Each district will take these options to labor negotiations with employees within the next few months.
The JPA consists of five members with seven votes: Judith Barranti, superintendent of the Hollister School District; Tom Guajardo, superintendent of the North County Joint Union School District; Jackie Munoz, superintendent of the Aromas-San Juan Unified School District; Foley and Slater. Slater and Barranti have two votes.
The JPA also approved dental and vision plans for the coming school year, which are both self-funded. The dental plan is set to increase 9.75 percent, while the vision plan will decrease in cost by 7.86 percent.
