The Kenai Peninsula Borough School District is looking closely at its health care offerings again as it tries to find ways to save money. The district’s Health Care Committee is floating the option of opting out of insurance for its “double-covered employees.”
KPBSD Assistant Superintendent Dave Jones said all employees who work 20 hours or more per week are eligible for year-round health benefits. And they’re required, as part of their employment, to enroll in the district’s health plan. That was written into the contracts for teachers and staff during the last round of negotiations.
The issue with that is some of the district’s employees are now double-covered. This type of things happens when you have a husband and wife working within KPBSD, or if someone has coverage through another source like Veteran’s Affairs or the Bureau of Indian Affairs.
Matt Fischer said, during contract negotiations, the unions for both teachers and staff mentioned the potential savings by including the choice to opt out. Fischer is a teacher at Soldotna Middle School. But during February’s school board meeting, he mentioned the district wanted to have those discussions outside of the collective bargaining agreement. The KPBSD health care broker Parker/Smith/Feek looked into the option after the negotiations were settled.
“The results of their study were given to us September 4, 2013 and they indicated that by allowing employees to opt out, the plan could see a savings of $1.2 million,” he said.
Fischer said that would have been $1.2 million each year. He said the study by the Hay Group reflects a savings if employees are given an opt-out as well. That study is included as part of a larger discussion at the state level about possibly putting all school districts under one state insurance umbrella.
Fischer said at this point he isn’t sure why there’s not been more of a push to do away with this “double-covered” situation; especially since the district would be seeing the benefit.
“Since the district pays 83 percent of the cost of health care, they see the majority of the savings.”
But in a memo to the KPBSD school board, Jones explained it isn’t that simple. He said the way the scenario is currently presented it’s not a “true” opt-out. Only one employee would be contributing while all dependents and the person who “opted-out” would still be using the health plan.
Jones said if the 91 double-covered employees were to opt-out there would be a net savings of close to $119,000. And yes, the majority of that savings would be seen by the district.
But Jones pointed out the costs for the staff left in the insurance pool could potentially go up by about $261 per year. The district’s costs could increase by a little more than $1,000 a year. Jones said the potential $1.2 million in savings would only be possible if an employee opted out and all their costs associated with claims went with them.
There are 73 employees that would be in this situation. Though Jones said, again, those remaining in the pool would see slightly higher costs for their health insurance.
The district expects these conversations to continue. The measure at the statehouse that would pool all school district employees into the same health care plan has not moved out of the Senate Finance Committee since it was introduced last year.