School district's insurance costs questioned

By FRANK SCHULTZ ( Contact )   Saturday, Aug. 16, 2008
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— Here’s a job: Predict the health care, drug and dental costs of one the county’s biggest employers.

That’s an annual task for the Janesville School District, which self-funds its own health insurance for employees and retirees.

The district actually farms that task out to a consulting firm.

Dismal and drab, right? But consider that without this estimate, officials can’t answer three of the most basic questions the school board faces:

-- How much money do we spend on education?

-- How much will taxpayers pay?

-- How much money should go to teacher salaries?

The bigger the insurance estimate, the less money budgeted for students and teachers.

Health care is a big chunk of the budget—about 15 percent of last year’s $110 million operating expenses.

The estimate for last year’s health claims was $16.36 million. That was $3.35 million more than what was needed.

That’s the worst overestimate in 10 years. The district has overestimated its health-care needs by more than $8 million in past six years combined.

Where should the extra money go? Now, it’s plowed back into the operating fund balance, allowing the school board to use it for emergencies, to avoid short-term cash-flow borrowing among other purposes. It also could be used as revenue in the following year to soften the tax impact, something the board is considering for 2008-09.

Teachers have claimed that a lot of the money should go to them. Their argument: State law requires their compensation be bargained as a package—benefits and salaries combined. Benefits must be paid for first. Leftover money goes to salaries.

So the higher the insurance estimate, the less money left to pay teachers.

If the estimate had been more accurate over the past six years, teachers could have seen bigger pay increases.

Teachers say it’s not just the money but the fact that Janesville’s teacher pay is lower than similarly sized school districts, and that mean’s it’s harder to recruit and retain good teachers.

District officials counter that they’re not seeing an exodus of teachers looking for better pay. And the district says it needs to budget enough money for health care so that it isn’t caught short, as it was to the tune of nearly $5 million from 1999 to 2002.

The insurance issue has soured and prolonged negotiations for the last two teachers contracts. Teachers have questioned whether the district is inflating the insurance cost, and that question has eroded trust that is needed to reach a settlement.

“How can it be over that much, year after year?” said teacher Dave Parr, who helped negotiate the recent contracts. “Clearly there’s something broken that needs to be fixed.”

School board member Tim Cullen recently spoke out on the issue. Cullen said the question that teachers raise needs to be answered, or it will keep causing friction between teachers and district leadership.

Cullen’s comments apparently spurred a school board study session Tuesday, at which the district’s consultants will explain how they project health care costs.

“The board, teachers, taxpayers—everybody needs to know and be sure the calculations have been done to the best of their ability at the time they were made and understand why costs coming in lower,” Cullen said.

Angel Tullar, manager of employee relations for the district, said part of the consultant’s explanation will be that, for unknown reasons, people aren’t getting sick as often as in the past.

Even if the consultant can satisfy everyone’s concerns about how the estimate is made, Tullar said, she expects the issue will continue to crop up, until the health budget starts showing a deficit instead of a surplus.

“Until we can all agree whose money it is, ... I’m not sure ever able to agree,” Tullar said.

STORYLINE

The dispute: Teacher trust in district leaders has eroded as the district continues to overestimate the cost of employee health insurance. Taxpayers and parents also have a stake in the multimillion-dollar process.

What’s new: The district’s estimate of the cost of health coverage missed the mark again last year. The $3 million overestimate was the largest in 10 years.

What’s next: The school board will hold a study session on the topic at 4 p.m. Tuesday at the Educational Services Center, 527 S. Franklin St., Janesville. Representatives of insurance consulting company Mortenson, Matzelle & Meldrum are slated to explain how they estimate the district’s health insurance costs.







reader COMMENTS (46)
imagine
Aug 18, 2008 at 7:52 a.m.
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These analogies are pointless.
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The point is that the School District of Janesville has the state’s largest reserve fund at over double the recommended amount ($32 million) – yet this board and administration has raised fees, cut staffing and budgets, and demanded teacher premium payments (unnecessarily damaging teacher morale).
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This board has created crisis while pointlessly crying crisis.

wisconsinheat
Aug 17, 2008 at 6:52 p.m.
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Here's a novel thought...why don't you all attend the meeting FIRST, and then have the discussion? You just might be surprised and get some answers before you even need to ask the questions.
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"Cullen’s comments apparently spurred a school board study session Tuesday, at which the district’s consultants will explain how they project health care costs."

“The board, teachers, taxpayers—everybody needs to know and be sure the calculations have been done to the best of their ability at the time they were made and understand why costs coming in lower,” Cullen said.

janesvillemom
Aug 17, 2008 at 4:47 p.m.
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Sorry, but Bill went off topic first, so in response:
The oil companies have plenty of leased public land, they just aren't using it! If they had exhausted the land they already lease, or given up the leases, then I could understand opening more public land to them, but they haven't.*
WASHINGTON - Nearly three-fourths of the 40 million acres of public land currently leased for oil and gas development in the continental United States outside Alaska isn’t producing any oil or gas, federal records show, even as the Bush administration pushes to open more environmentally sensitive public lands for oil and gas development.

“The aggressive leasing of public land pushed by the Bush administration is a land grab, pure and simple, giving industry more and more control over public land while costing taxpayers millions of dollars,” said Peter Morton, a resource economist with the Wilderness Society.

Morton said the leases, which companies can lock up for 10 years with annual rents of only $2 to $3 an acre, are an economic boon to some companies because they count as assets that can make debt refinancing easier while also attracting potential investors.
Link:http://www.msnbc.msn.com/id/5111184

Rocky
Aug 17, 2008 at 4:42 p.m.
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Rock (Bill) - I said the DISTRICT is, in essence, stealing. Not you, personally. (Hey - I don't even live in the Janesville School District, nor do I or any of my family members work for the district, so I'm outside the situation all together). But if the word "stealing" bothers you so much, I'll change it to "failing to properly remunerate".

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Clearly we just disagree on the interpretation of school funding law. That is the basis of this whole dispute. I wouldn't bet a nickel of my "way more than any teacher" (nice try) salary on any court decision (because that is what will eventually happen here) - even one that was deciding if water was wet or not.

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The bottom line for me comes down to the fact that the teachers were promised "X" dollars in compensation. The district didn't deliver and pocketed the difference - to the tune of $8 million. Now, PROVIDED the teachers didn't sign away their rights to this in their contract (which you have claimed they did), then they'd be entitled to that money.

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A question: If expenses had exceeded revenues in those year, would you have increased premiums the following contract to make up the difference? Of course. Would that increase have had a dollar for dollar corresponding decrease in teacher pay raises? Of course - because the QEO School Finance law would have allowed it. So if costs went up- it would have come out of (future) teacher pay. Why when costs go down does it not work in reverse?

rocksolid
Aug 17, 2008 at 4:07 p.m.
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Rocky: So your "stealing" comment still stands? As to you giving me an "F", let's make a deal. I will wager my school board salary against your teaching salary that says that I am right. Deal? Finally, let's say that I agree to pay you $20.00 to cut my lawn and I agree to pay for the gas. If gas goes on sale and costs me less, are you going to ask for more money? Conversely, if gas jumps up because the liberals won't let us drill anywhere (I just had to add a political dig there - sorry), are you going to offer me any money back? I am guessing you won't.

As you correctly stated in your first paragrah, I am almost certain that the language (stating that JEA had no claims to any surpluses) was in the contract because it was written to clear up any point of contention that resulted from the grievance. Therefore, as you put it, discussion over.

mooshoo: I will be glad to inquire if that type of data is able to be posted and in what format etc. Thanks for keeping the discussion professional.

Bill Sodemann

Rocky
Aug 17, 2008 at 2:12 p.m.
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Rocksolid (Bill) - Sorry if you're taking it personally, but I calls 'em like I sees 'em.

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Now, I can't address the specifics of the Janesville teacher's contract. If the teachers did indeed agree to a provision stating that all extra insurance savings would be returned to the district - then the discussion is over. The shouldn't be allowed to go back on that one.

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I'm still pretty sure, however, that your thoughts on the QEO & School Finance law and their application are incorrect, so sorry, but the "F" stands. Since the bargain was done using terms and costs according to the law, the entire contract is, therefore, under the law. When the district calculated the "cost" of the contract, the percentage was reported, according to the law, as a package that included wages and benefits. Because that package met or exceeded 3.8% (and the teachers agreed to it), it was legal. With the savings on health care, the package didn't actually pay out what was agreed upon. I'm not sure if it is now under a 3.8% deal or not, but it is less than agreed.

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Let's put this another way. I agree to pay you to mow my lawn, and feed you as part of the process. We agree on a total compensation of $30. $20 will be in cash, and the other $10 in food. For whatever reason, I do feed you, but only with $5 worth of food. We agreed on $30 worth of compensation, but I only gave you $25 worth. I claim that I don't owe you the other $5 because I was able to save on the lunch and that savings is mine. The agreement, however, was based on the total value of the package. I delivered the cheaper package and pocketed the difference. Is that OK?

MooShoo
Aug 17, 2008 at 2:10 p.m.
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Billnewbie-
I wish to fine tune my point with references to financial information from the Janesville School District. I checked its website and there is no links to finacial statements or operating budgets. I think we can both agree that type of information needs to be available to the voting public.
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Rocksolid, if you are monitoring the discussion, would you please ask Administration to make district financial statements and budgets available to the public through the website.

billnewbie
Aug 17, 2008 at 1:50 p.m.
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MooShoo:
When you wrote "The reason we have health insurance is for catastrophic loss. That is why we call it I N S U R A N C E" I took that to mean that you were including yourself in the insurance plan under discussion and that therefore you are a teacher because you used the word “we”. I can see now that you meant it as a generalization.
I did not miss the teacher’s point. I do however disagree with it. The point I was trying to make that you claim makes no sense is that insurance coverage to an individual has tangible value, such as medical services used by the insured and paid for by the insurer. When the teachers lay claim to the excess funds set aside by the school district, they act like the example of the individual who thinks he is due more compensation because he had not incurred any cost for his employer. Yet if the insurance were under funded, the teachers would no doubt object strenuously to salary reductions to make up the difference.
The teacher’s insurance plan most certainly does cover visits to proctologists and a great many other routine and preventative medical visits and procedures. So, in reality, their health care insurance plan is not just catastrophe insurance, it’s also a perquisite.

MooShoo
Aug 17, 2008 at 1:42 p.m.
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Bingo Sluggo!

huh
Aug 17, 2008 at 1:32 p.m.
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I don't understand why GM workers and teachers are always ridiculed. We will see how much we miss GM soon enough, but imagine a world without teachers. Teaching is a difficult job, and it gets more and more difficult every year with new laws and regulations and diminishing respect towards teachers by kids and parents. When I was a kid the parents stood up for the teachers. Now they stand up for the kids even when the kids is in the wrong. In addition, on the QEO which guarantees teachers a 3.8% package increase if implemented. Keep in mind that salaries would fall if insuranec would go up more than 3.8%. So why is it that Janesville is so afraid to give the teachers the money back. Of course they over estimate. That is good, but then the teachers need to be compensated to make up the difference. Finally, keep in mind two things. 1) We all choose our own careers. 2) Both sides agree to a contract and the Janesville residents elect the school board to represent them!

sluggo
Aug 17, 2008 at 12:54 p.m.
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Now as I understand it from previous posts on previous articles that is what the insurance company would do if the district wasn't self-funded. At least this way the over estimate goes in the district's pot. But it seems pretty beneficial for whoever is doing the estimating.

sluggo
Aug 17, 2008 at 12:50 p.m.
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Let's try out an analogy. Let's pretend I hire you to be my butler. We agree that I will pay you $20 an hour - but I'll pay your electric bill. So you actually are only going to get $12 in your check. Now- here's where it benefits me - if your electric bill is under the amount I've kept out of your check - I get to finance my hot tub. Works for me! You bet I'm going to over estimate!

MooShoo
Aug 17, 2008 at 12:27 p.m.
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Billnewbie:

Your posts would indicate you are a thinker and a smart guy. But you tend to use arguments on the margin (better word than extreme) that do not make sense - especially when it comes to insurance.
*
Insurance is a means to control loss through pooled risk. Thus, your "logical conclusion" argument makes absolutely no sense. What rational person would argue that because they had no claims, their insurance was worthless? Conversly, those with a lot of claims should have their salary reduced? Risk is spread out amoung all insureds. The bigger the pool, the higher the probability that the actuarial outcomes will occur. I have health insurance for the big claim. If you think your health insurance is to pay for your visits to the Proctologist, I have no argument with that viewpoint.
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You miss the whole point of the teacher's argument. Their health insurance is part of their compensation package. For every dollar increase in the cost of insurance, they get one less dollar of salary increase. The district over estimated the cost of health insurance. That is the reason they feel they have a claim to a surplus that lapsed to the general fund at the end of a fiscal year. I tend to agree with their claim.
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You assume I am a teacher. I am not. Let us debate on facts, points of view, but not assumptions.

billnewbie
Aug 17, 2008 at 10:23 a.m.
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MOC0428:
It seems that if “our not so intelligent community” is as intellectually deficient as you claim, perhaps the teachers should take credit for that instead of making pretentious claims for their role in the condition of our nation which some may think is not as flattering to teachers as you may assume.
Considering your opinion of the condition of our community, perhaps the teachers should offer the taxpayers a refund.
Apparently, in your opinion, teacher bashing is contemptible slander, but community bashing is perfectly acceptable.

billnewbie
Aug 17, 2008 at 10:22 a.m.
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MooShoo:
You wrote "The reason we have health insurance is for catastrophic loss". Doesn't your health insurance cover wellness programs, vaccinations, check ups and the like which cannot be described as "catastrophic loss" and which should instead be described as ordinary personal expenses that the beneficiaries of your health insurance are relieved of? Doesn’t that save you money with every routine visit to the doctor, dentist, chiropractor, allergist, et cetera? Maybe the school district should be able to count the money paid for your benefit on such non catastrophic losses as a salary enhancement which could then be included in your compensation.
How disappointing that a teacher opposes an argument with characterizations such as “extreme” rather than with reason and fact.

Spanky
Aug 17, 2008 at 9:58 a.m.
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Teachers have it made. Don't let them fool you and make you think that they are overworked.

MooShoo
Aug 16, 2008 at 11:32 p.m.
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I tip my beer to you goggles for thinking outside the box. But the school district is constrained by state law. It cannot levy a million for "overestimates". Your suggestion for insurance savings can be reached with consessions for wellness efforts by employees.

BeerGoggles
Aug 16, 2008 at 9:40 p.m.
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I am not an insurance expert or knowledgeable about teacher contracts. But here's a novel idea. Agree on a contract for the benefits and salary for the teachers. Then agree to an overestimate price. For example, if district has overestimated by $1 million, anything over that $1 mill goes to the teachers in a bonus. That way it will not be a reoccuring payment (like a raise would be). That would give the teachers an incentive to be healthy and the district an extra $1 millioin in their reserve fund. It probably won't work though because of egos (see Ted Thompson/Brett Favre negotiation!)

rocksolid
Aug 16, 2008 at 8:56 p.m.
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rocky: First you say that I am thief (we are "stealing" from the teachers, now you give me an "F", saying that I do not understand school finance. I can't wait to see what you say about me next(Anonymously of course)! I will double check to be sure, but I stand behind my earlier statements. QEO law only applies if a QEO is implemented. You are correct that QEO law affects negotiations because both sides know what the end result could be, and you are correct that QEO terms are sometimes used to describe a total package settlement. However, if a settlement is made outside of the QEO, as all of ours have been, there is nothing that backs up your statement. Furthermore, I am relatively certain that at least in the last two settlements (05-07 & 07-09), specific language was put in the contract that made it clear that JEA was not entitled to any additional funds if there was a surplus. Finally, remember that if we were not self insured, we would not be having this discussion. Instead, the cost of insurance would be much higher for comparable benefits and if claims were low, the insurance company is certainly not going to give us any money back. If we go away from the self insurance model, it would certainly cost both JEA and the district much more. Perhaps my HRA proposal will get more consideration for the next contract.

iredrobin60: I am almost certain that anyone can attend the meeting (Sam, you, whomever). I encourage you to do so as I firmly believe that when we face issues together, we can find optimal solutions. As to your claim that you even voted for me, let me fix my chair as it broke when I fell off of it!

Time to get away from controversy and see if Aaron Rodgers really can be the leader of the Pack! Good night!

Bill Sodemann

DrTalk
Aug 16, 2008 at 8:04 p.m.
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"Another article where our not so intelligent community will start to bash our teachers."
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You're still don't quite understand yet, MOC0428. It's not the teachers that are the problem. It's the teacher's union and the beurocracy of a government run education system. It would be much more economical to privatize the education system.

janesvillean
Aug 16, 2008 at 7:40 p.m.
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The bottom line is that insurance is part of the compensation package that attracts quality teachers to the school district.

jredrobin60
Aug 16, 2008 at 7:30 p.m.
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Bill:

Are Sam Loizzo, the new negotiators, and or union leaders invited to this meeting? It would go toward building trust among the teachers and the board/ESC. Especially since insurance mone is one of the main issues in my building.

As a teacher, who does not always agree with the way you vote, I sure do respect you and your open way of dealing with issues. I even voted for you.

jqpublic
Aug 16, 2008 at 7:08 p.m.
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Pat: Is it the teachers fault that many people do not have health insurance?

pat
Aug 16, 2008 at 6:46 p.m.
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They need to be glad they have insurance at all. Many do not.

MOC0428
Aug 16, 2008 at 6:33 p.m.
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Here we go again. Another article where our not so intelligent community will start to bash our teachers. I appreciate that the article was written but stop with the teacher bashing. Without teachers where would we be? I would certainly think we would not have near the nation we do without them.

MooShoo
Aug 16, 2008 at 3:38 p.m.
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Wisconsinheat, the whole purpose of my post was to point out that the negotiating rules are different for teachers than they are for sheriff deputies or highway workers. Teachers are under the QEO, county employees are not. I have no doubt the guys sitting across the table from you want you to give up something in exchange for reducing the cost of Rock County's health insurance premium. The difference is you can tell them to take a hike, the teachers cannot. You cannot strike, your labor team works within patterns of settlement, and you go to mediation arbitration if cannot reach agreement.

Rocky
Aug 16, 2008 at 3:37 p.m.
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Rocksolid (Bill) - I think you need to review your homework before attending your next meeting. You receive an "F" for understanding school finance law. The district doesn't have to "impose a contract" for the QEO law to be in effect. Every contract is governed by the law. I'm sure when the district business manager "costed" the contract, it was done using the "cast forward" accounting allowed under QEO law, and when the district reported the increase it was accounted as prescribed under the QEO law, which requires salaries and benefits to be bundled. So you have been, for the past 12 years, operating under this law. You cannot just "ignore" it now that it is inconvenient.

wisconsinheat
Aug 16, 2008 at 3:10 p.m.
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It might not be MANDATORY, but you can bet that seldom, if ever, is it NOT a big part of any negotiations... simply by the nature of the beast.

MooShoo
Aug 16, 2008 at 3:05 p.m.
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Wisconsinheat, I stand corrected. I said "For most public employees represented by unions (state, city, county) the premium cost borne by the employer is not a subject of bargaining." I am wrong. The premium cost for health insurance for ALL public employees is not a mandatory subject of bargaining.

wisconsinheat
Aug 16, 2008 at 3 p.m.
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All of them...at the county level.

MooShoo
Aug 16, 2008 at 2:57 p.m.
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Wisconsinheat, did any of those negotiating comittees you served on negotiate public sector labor contracts?

MooShoo
Aug 16, 2008 at 2:49 p.m.
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Billnewbie, sake of arguments done on the extreme don't make sense. The reason we have health insurance is for catastrophic loss. That is why we call it I N S U R A N C E.

wisconsinheat
Aug 16, 2008 at 2:48 p.m.
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"For most public employees represented by unions (state, city, county) the premium cost borne by the employer is not a subject of bargaining."
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This is absolutely not true.
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Having been a member of numerous negotiating committees, I can attest to the fact that it is a HUGE part of bargaining.

MooShoo
Aug 16, 2008 at 2:29 p.m.
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The QEO and 2/3 state funding for public education are a marriage of convenience. It is an attempt to limit the growth in property taxes as well as cap teacher salary and benefits. It works well when inflation is low. It does not work well when the annual cost of health care (i.e. insurance premiums) increases at 12-15% per year.
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The types of medical procedures covered under a health insurance plan cannot change unless they are bargained. Obviously, the more procedures covered, the better the plan for the employee, and the higher the premium for the employer. For most public employees represented by unions (state, city, county) the premium cost borne by the employer is not a subject of bargaining. Thus, if the cost of health insurance goes up on any given plan, it is absorbed by the government. School districts are a different animal because of the QEO. The cost increase of the premium is considered part of the entire wage and benefit package that is negotiated. While I agree with Mr. Sodemann that the QEO may not have been invoked, the premise under which negotiations take place are predicated on a QEO.

billnewbie
Aug 16, 2008 at 2:22 p.m.
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The whole argument seems like nonsense. The teachers get paid according to what their collective contract says they are to be paid and they and their families are covered by a group health plan according to that contract provided by their employer, the school district.
If you take this argument to its logical conclusion a teacher who had no health insurance claim could argue that the health plan provided was of no value to him and that he is due compensation. Conversely, the school system could claim that a teacher with excessive health insurance claims could have his salary reduced to make up the difference.
If the school district decided to contract with an insurance company to provide health care insurance at a set cost, any savings incurred would belong to the insurance company benefiting no one but themselves.
Either way, the teachers have high quality health care insurance. It seems rather outrageous that the teachers lay claim to any surplus that health insurance fund accrues, the source of which are taxpayers, property and income as well as sales taxpayers.

JohnDoe
Aug 16, 2008 at 1:36 p.m.
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"Teachers have claimed that a lot of the money should go to them. Their argument: State law requires their compensation be bargained as a package—benefits and salaries combined. Benefits must be paid for first. Leftover money goes to salaries."
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There seems to be much confusion on this benefit.
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Wouldn't the "benefit" actually be the "value" of the insurance COVERAGE...and NOT the amount in reserve to pay for the covered expenses?
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Otherwise it would be like saying an employer paid premium is not the benefit but the ability of the employer to pay would be. Doesn't make sense.

get_the_facts_people
Aug 16, 2008 at 12:35 p.m.
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Teachers get 2 personal days a year. One for each semester. To answer your second question, no they do not get vacation time in addition to their scheduled breaks.

whybesad
Aug 16, 2008 at 12:08 p.m.
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How many personal days do teachers get per year? Do they get vacation time along with scheduled holidays and breaks? If so how long?

DrTalk
Aug 16, 2008 at 11:53 a.m.
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After reading this article I'd hate to see the Federal government in charge of the health care system. Just one more reason to to have everybody take care of their own health care. It would be much more efficient and less expensive.
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NObama '08

rocksolid
Aug 16, 2008 at 10:58 a.m.
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Need to clarify a few things.

sannio: This is the school district, it has nothing to do with the city.

rocky: The "QEO" has never been implemented in Janesville. Only if the JEA contract is implemented under QEO law, could there be any validity to your argument. Also, if you recall, I was the one who proposed an HRA setup that could return part of an insurance surplus to the JEA (after a reserve is met). To me, this would have created a partnership between the district and the JEA and avoided outrageous dialogue such as the "stealing" comment that you made.

janesvillemom: Great idea! We have already implemented a wellness plan as part of the last settlement.

Sincerely,
Bill Sodemann

BeloitGuy
Aug 16, 2008 at 10:49 a.m.
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Woodman - Teachers work on salary and are not paid hourly. Teachers must have a 4 year degree. GM workers don't need this. Teachers who get paid more have furthered their education with credits, which again costs money. If you are figuring out a teacher's hourly wage by a 40 hour work week thing again! I don't know of any teacher who can finish all their work in 8 hours per day. Your point is ludicrous!

woodsman
Aug 16, 2008 at 10:39 a.m.
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Did i read some where that teachers are getting 22 dollars an hour?? Thats just about as much as a g.m. worker! I THINK that is alot of money.

MooShoo
Aug 16, 2008 at 10:24 a.m.
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The teachers have a legitimate gripe. Under the QEO, the inflationary increases of salaries and benefits are lumped together in a package that is capped at 3.8%. For every dollar increase in health insurance, they get one less dollar of salary increase. The school district should not benefit from over estimating the cost of health insurance. It is a fairness issue.
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Some have argued that the teachers do not have to come up with additional funds if the cost of health insurance exceeds the budgeted amount. Its a bad argument. One could even make the case that it allows school boards to bargain in bad faith. Teachers are under contract and have no control over their health insurance costs. It is the responsibility of the school district and school board to determine the cost and budget the funds. Under QEO, teachers should not be penalized for the school district's mistakes.

janesvillemom
Aug 16, 2008 at 9:34 a.m.
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Maybe they should invest it in a Wellness Program for the teachers. They could pay for gym memberships, or create a program where they would pay a nominal amount for every pro-health activity the teachers participated in, or they could put in exercise rooms at the schools, or somehow invest that money into wellness for the teachers. Everyone wins because the teachers get the money as a benefit and the future healthcare costs should go down for the taxpayers and the teachers!

Rocky
Aug 16, 2008 at 9:25 a.m.
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The taxpayers love the QEO law when it limited pay and benefit increases to 3.8%, but one of the provisions of the law is that pay and benefits are grouped - so a reported 3.8% pay increase may really be mostly a benefit increase with little or no actual salary increase.

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Conversely, any savings in benefit costs are required by law to be passed back to the teachers as salary. It is a package deal. You can't count the increases in benefit costs against teachers salaries and not count the decreases as a credit. If costs were over the estimate the balance would, indeed, be deducted from teacher salaries the following year in the form of higher premiums.

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So the teachers have a legitimate gripe, here. That savings should be returned to the teachers as that is part of the negotiated package under QEO. The district is stealing from the teachers.

sannio
Aug 16, 2008 at 8:05 a.m.
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While I can appreciate the teachers position that the extra money should go to them, I have to disagree. They agreed to a compensation package, and the city needs to raise money to fulfill it. If the city overestimates insurance, and ends up with extra money, it should be rolled over into the next year. What if there was an underestimate? According to the teachers they would have to accept less insurance, or pay. Something I doubt any of them would agree to.

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