In an effort to control rapidly rising healthcare costs for
county educators, the San Benito County Office of Education has
dissolved the Joint Powers Authority created to unify employees at
the county’s 11 school districts to bargain for affordable health
insurance.
Hollister – In an effort to control rapidly rising healthcare costs for county educators, the San Benito County Office of Education has dissolved the Joint Powers Authority created to unify employees at the county’s 11 school districts to bargain for affordable health insurance.
Faced with a potential 35 percent increase in healthcare premiums this year, the County Board of Education voted to end the 25-year-old JPA on April 7, leaving each district responsible for finding their own healthcare providers by March 25. School districts are expecting to save hundreds of thousands of tax-payer dollars by abandoning the JPA.
Despite recent changes, including becoming self-insured last year and doubling employee co-payments, the JPA is still bleeding money in a world of higher healthcare costs. This year employer premiums increased 20 percent and are expected to rise another 35 percent next year, said Jean Burns Slater, superintendent of San Benito High School District and president of the JPA board.
“Over the last two years there have been astronomical increasing costs (for health care),” she said. “People are not getting the best dollar for their medical coverage.”
Since becoming self-insured last year the JPA has paid out nearly three quarters of its $2 million reserves.
“We have to get out of the self-insured business,” Slater said. “It was not working at all. We weren’t collecting enough premiums, and doctor’s bills were too high.”
Premiums paid were negotiated separately with the JPA by each school district within it. For example, the San Benito High School District paid $817 per employee per month in 2005-06, an amount that was expected to rise to more than $1,000 in 2006-07.
Districts in the county are now negotiating healthcare plans with Self Insured Schools of California, which is a JPA administered by the Kern County Office of Education.
The essential difference between SISC and San Benito County’s JPA is the number of members. Where the San Benito County’s JPA had about 1,000 people, SISC has 60,000, said Steve Kain, lead negotiator for the Hollister Teachers’ Association.
“The JPA was a money-loser,” Kain said, adding that healthcare costs under the JPA would have risen about 35 percent next year, whereas under SISC costs will increase only about 7.7 percent. “A 35 percent increase would have bankrupted HSD.”
To become part of SISC, San Benito County’s JPA had to be dissolved because of requirements made by Blue Cross, SISC Chief Executive Officer Russell Bigler said.
The JPA will continue in force until June 30, and then it could be as long as two years before it is completely dissolved, said Tim Foley, county superintendent of schools and JPA board treasurer.
For the next year to 14 months, medical bills can still be submitted to the JPA, and in the second year an audit will be performed and any reserves will be distributed to the school districts, he said.
“It will take a couple of years for business to be concluded,” Foley said.
The county education office is also negotiating with SISC for healthcare coverage. Rural school districts will be under the coverage umbrella of the county education office, Foley said.
“It has an excellent reputation. It’s just a different delivery model,” Foley said. “Before we maintained local control … this will be a bit different, but I am confident that employees will be satisfied.”
Self Insured Schools of California will talk with local school officials and union leaders about needs and problems unique to the county’s districts, Bigler said.
“Dissolving the JPA doesn’t dissolve unity,” he said.
Kain also thinks local districts will be able to maintain unity and some degree of local control even though the JPA has been dissolved.
“What we are hoping to have in lieu of the JPA is a benefit committee to deal with SISC each year,” he said.
Health coverage for retired teachers will depend on the particular district from which they retired from, Foley said.
“They are of great concern,” he said. “Retirees will be under the terms of the individual district. Hollister School District (retirees), for instance, will have access to plans offered by that district.”
While the JPA offered two coverage plans, employees of districts that choose medical coverage through SISC will have three plans to choose from: a basic plan that is paid for by the district; a middle plan that is also paid by the district; and a higher coverage plan, for which employees have to pay the difference in premiums.
Teachers who take the least expensive plan will receive the difference between the basic and the middle plans, which can be as much as $1,500 per year, Kain said.
“It’s giving us more options that we didn’t have,” under the JPA, he said.
Many teachers are glad that the JPA is being dissolved and districts are looking for less expensive healthcare.
“We’re delighted it folded,” Kain said. “It was a no-brainer.”
Luke Roney covers politics and agriculture for the Free Lance. Reach him at 831-637-5566 ext. 335 or at [email protected]
