School board OKs $75,000 to help lower insurance costs
39.59-percent rate increase more than many support staff say they can handle
November 26, 2008
Trying to assist support staff with a major insurance cost increase, the Crawford County Community School Corp. Board of Trustees last Tuesday provided another $75,000 on top of what the corporation already pays towards the group premium.
The old rates, which expired when the plan was up for renewal Oct. 31, required that support staff pay between $18.15 per month for single employee coverage and $67.52 for a family plan.
Anthem Blue Cross and Blue Shield increased the group plan rate by 39.59 percent at the renewal date because the amount of claims during the past year — $2.2 million — exceeded the amount it had established the previous year's rates on by $434,219. The corporation budgeted for a 10-percent increase, which is about average, but the bad year in claims skyrocketed the rate.
The monthly amount the support staff would have paid for the exact same plan after the renewal jumped to $189.19 for a single employee plan to $584.05 for family coverage.
Recognizing that support staff, who are paid an hourly wage and many of whom only work during the school year, can't afford such increases, the board, meeting at English Elementary School, voted 6-1 (trustee Myrna Sanders against) to provide the additional $75,000. Part of the money will come from insurance reserves, while the rest will come from elsewhere in the General Fund.
"I think $75,000 speaks to the fact we do understand and are sympathetic," Superintendent Dr. Mark Eastridge said during an interview on Thursday.
Despite the additional corporation dollars, the rates remain higher than those of the old plan. Single employee coverage now costs support staff $146.16 ($128.01 more) while a family plan costs $415.17 ($347.65 more). Therefore, the corporation decided to offer employees a second plan.
The rates are still higher than those of the previous year's plan, but are much less expensive than those of the first plan. Single employee coverage costs support staff $57.98 per month and a family plan costs $149.46.
However, the reduction in rates comes at a cost in terms of what the plan offers. Major changes include:
ĽAn increase in the deductible. A single deductible, at $1,000, is $775 higher than the first plan and a family deductible of $2,000 is $1,550 more.
ĽAn increase in the out-of-pocket maximum. While employees still pay just 20 percent of costs up to the out-of-pocket maximum, the maximum is more expensive. The single out-of-pocket maximum is $5,000, compared to $725 for the other plan, and the family out-of-pocket maximum is $10,000, $8,550 more than the first plan.
ĽAn increase in co-pay costs for prescriptions. Whereas the first plan charges $4 or $8, the second plan charges, $10, $20 or $30.
Eastridge said at the meeting that a certain number of employees had to enroll in the second plan for it to be offered, but on Thursday he said Anthem will provide it for at least one year no matter the number of employees.
A room full of worried support staff expressed their fears to the board and Eastridge at the meeting, with many saying they can't afford the increased cost of the original plan and the second plan has too high of a deductible and out-of-pocket maximum.
Several support staff were upset they weren't given more notice before the new rate took effect on Nov. 1, and one person asked board members who receive insurance if they would be willing to pay on their coverage. Sanders and Lee Holzbog were among the trustees who said they would.
"I'll give every dime of it back (to help lower costs)," Holzbog said. "I want you people to have insurance" that is affordable.
Monica Holzbog, who works at Patoka Elementary School, said some support staff members may be forced to make a difficult decision.
"I know you guys are trying your best, but most of us are going to have to choose between this job and having health insurance," she said, later adding, "We are already underpaid, but now we feel very undervalued."
Eastridge said the board just spent 90 minutes in closed executive session "agonizing" over what to do. The only other thing trustees can do to lower the rate is renegotiate the original plan with the Crawford County Classroom Teachers Association, he said.
"We could see a 5-to-10-percent change in tweaking" the plan, Eastridge said. "But understand, the claims are just too heavy; there's only so much we can do."
Renegotiating would drop the rate increase down from 39.59 percent to 33.51 percent. Eric Belcher, a teacher at Crawford County Junior-Senior High School and co-president of the Crawford County CTA, on Friday said he believes the actual dollar amount on monthly premiums would decrease by only about $12.
"So, the impact is very small," he said.
However, Belcher added, the CTA is always willing to talk with the corporation and has done so in the past to save both the corporation and support staff money. A few years ago, the CTA, whose members had only paid $1 annually on their insurance for years, agreed to start paying more, and, because of the rate increase, now pay up to $350 per year. The CTA at the same time agreed to allow the corporation to bond its severance liability, which saved the corporation $7.5 million, Belcher said. Then, last year the CTA agreed to let the corporation change insurance administrators in an attempt to save on insurance costs as long as the carrier is the same, he added.
"We don't want to see anybody's insurance go up," Belcher said, noting the CTA membership respects the support staff and the jobs they do.
"I hope something can be done to help, because we have a really good staff," he said.
Eastridge on Thursday said the corporation requested rates from about 40 companies, but only a handful responded, and their rates weren't any better than Anthem.
He said he explained to the board on Tuesday night that providing another $75,000 to lower the support staff may cause a funding shortage later, and personnel cuts may have to be considered.
Health insurance costs, however, are likely to remain an annual problem, Eastridge said, explaining he is especially worried with the state taking on all General Fund costs beginning in 2009, using a sales tax increase to provide funding and moving away from more stable property tax revenue. He said he is concerned about what happens if the economic downturn causes the state to take in less revenue from the sales tax than anticipated.
Eastridge said there have been rumblings about flatlining education dollars in the next two-year state budget to be taken up during the legislative session beginning in January. Since costs like insurance, salaries and utilities aren't static, no increase in revenue would be disastrous for a school corporation, he said.
"That scares me a little bit when I hear things like that," he said.
Eastridge said in the meantime, in an effort to keep premiums from increasing too much next year, he will encourage employees on the insurance plan to use less expensive generic prescriptions when available. During the past year, the group, made up of 189 employees and, when dependents are included, 495 total people, used $601,704 worth of prescriptions. While group members only paid a fraction of that amount because of the co-pay levels, the total costs of the prescriptions is figured into the insurance renewal rate.