Re1J school district faces challenges in negotiations

Health insurance gobbling up the money

by Olivia Lueckemeyer

Though unforeseen insurance costs hindered salary and benefit negotiations last week, a unified plan has been agreed upon that would continue to offer school district employees health insurance and opportunities for salary increases. If approved, some health insurance plans will require teachers to pay a small part of the premium.

“I know we did the best we could do with what we have facing us,” lead negotiator and president of the Gunnison County Education Association Rita Merrigan said. “Everyone is distressed about the incredible cost of insurance, but I do believe all parties accepted the outcome as the best possible one under the circumstances.”

Using an interest-based bargaining process, the RE1J school board, administration and the teacher’s association negotiated a plan for the 2015-2016 school year that would not only honor the current salary schedule, but would also offer three health care options for employees. Due to a surge in insurance responsibility under the Affordable Care Act, the district is increasing its health care contribution per person per year to $9,168, a significant leap from last year’s contribution of $7,200.

This year the district will also fund $475,000 of so-called laser liability, a mechanism that protects employees whose deductibles were increased due to high health costs. Instead of building this cost into employee premiums, which would have added an additional $200 per person per month, the district has dipped into its general fund to cover the potential cost.

“We had to move half a million dollars from the general fund to balance the budget, but we tried to make it as affordable as possible within our options,” school board member Bill Powell said.

Under policy, the district’s savings account, also called the general fund balance, must stay at 15 percent of budgeted expenditures. The increased cost of insurance and laser liability, among other factors, forced the district to extract about $750,000 from the general fund this year, putting it at 14.81 percent of budgeted expenditures. Because of this, the district is for the first time asking its employees to contribute financially to their health care plans or take a plan with a higher deductible.

The first two options are high-deductible health plans, or HDHP, that give the employee the opportunity to contribute to a health savings account and include either a $6,000 deductible and no monthly premium, or a $3,000 deductible and a $57 monthly premium. The third option, a Preferred Provider Organization (PPO) medical plan, has no health savings account option, but includes a $1,500 deductible and an $81 premium. The district will pay $764 per person per month, regardless of the employee’s plan choice.

“The plan was structured so that the district’s contribution remains the same, even though the deductibles change,” Powell said. “This allows us to budget.”

While each plan includes the option of adding a spouse or children, the cost for doing so is substantial. If employees decide to include their family in the $3,000 deductible plan, for instance, their monthly cost would increase nearly 27 fold. Because of this, Re1J District business manager Stephanie Juneau believes many school district employees will opt to shop elsewhere for their family’s health care coverage.

“If you’re a full-time teacher, there is not going to be a better option than this on the marketplace for yourself individually, but there very well may be for your spouse and children,” Juneau said.

The district will also pay the 0.9 percent state-mandated increase in PERA (Public Employees’ Retirement Association) benefits, which makes its total contribution 18.8 percent of wages for the 2015-2016 school year.

Decisions about salary schedules were also made during negotiations. According to the Master Agreement, each year teachers are eligible for a two percent raise for hours spent teaching, advances in education, or both). This year the negotiation parties agreed to honor the Master Agreement’s “steps and lanes” in regard to the teacher salary schedule. However, due to the raised cost in insurance, a request for a .5 percent base salary raise was denied.

“With us allowing ‘steps and lanes’ movements, we couldn’t afford another half percent on the base,” Powell said. “They later reduced that to .3 percent, which was still not affordable for the district.”

According to Powell, some school districts in Colorado are on the verge of bankruptcy due to the surge in federally mandated insurance costs. Many are opting to take the government fine rather than offering insurance, and instead are giving their employees a lump sum to seek out alternative plans. While this was not the solution for the district this year, Powell says the option remains in the realm of possibility.

“The district looked at what it would cost if we didn’t implement the Affordable Care Act, and I think I recall the fine to be half a million dollars,” Powell said. “We opted not to go that way, but the option has to remain on the table.”

The teacher’s association members have until noon on Friday to vote to ratify the memorandum of understanding regarding 2015-2016 salaries and benefits. If the memorandum passes, the issue then goes before the school board for a vote on May 18. If either party rejects the memorandum, the process will begin again from scratch.

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