Janesville51.6°

School workers to pay more for insurance

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Frank Schultz
September 7, 2012

— Changes in insurance coverage for some 1,200 employees of the Janesville School District could save about $7 million next year.

That's a cost reduction of about 35 percent, but as one union leader put it at a school board meeting Thursday: "You haven't saved money. We've just shifted costs to the employees."

That was from Dave Parr, president of the teachers union. Also affected are union custodians, clerks, secretaries, aides, maintenance workers and food service workers.

The changes were no surprise to anyone who attended a special school board meeting Thursday night. Invited to attend were representatives of all employee groups.

The district's insurance consultant, Boyd Consulting Group, revealed its recommendations at the meeting.

Employees apparently will pay higher deductibles and in some cases higher premiums when the new health plan goes into effect July 1, 2013.

The changes are coming because of the new state law that stops public-employee unions from negotiating for anything except wages. The district's union contracts run out June 30, 2013. After that, the school board and administration control benefits and working conditions.

The school board's decision on health insurance should come by January because that is when administrators' contracts are renewed, Superintendent Karen Schulte wrote in a blog post last month.

The actual medical coverage won't change, the consultants said. But the amounts employees pay will.

Insurance now covers 100 percent of base costs, but the new plans will cover 80 percent to 90 percent, depending on employees' choices, said consultant Bill Boyd.

Surveys showed overwhelmingly that employees want a choice, so two optional insurance plans were developed, Boyd said.

Option 1 includes monthly premiums of about $40 a month for a single, $72 for an employee plus one child, $92 for an employee plus spouse, or $126 for family coverage.

Current premium payments are $17 single or $43 family.

Option 1 includes a deductible five times higher than the current plan.

Option 2 is a Health Reimbursement Arrangement, or HRA. The district would pick up all the premium costs, but deductibles would be 10 times higher for a single person and nearly seven times higher for a family.

Drug costs for both plans would rise. For example, a generic drug now costs the employee $5. Employees would pay $20 under the new plans.

School board member Dave DiStefano, an insurance consultant himself, responded to Parr.

"The premium share is still exceptionally generous compared to the private sector," he said.

Private sector workers are paying much higher deductibles and premiums of $400 to $600 a month, DiStefano said.

School board member Kevin Murray said comparisons to private-sector insurance are wrongheaded.

Employees gave up wages in years past so they could get better benefits, Murray said, so if insurance plans are to be compared, then the board should compare everythingówages, working conditions and benefits.

"I've got a feeling there's going to be quite a bit of debate" on how much money the district should save on health insurance, Murray said.

School board President Bill Sodemann responded that the board must consider how it will retain high-quality employees and stay competitive with other districts.



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