|
|
 |
|
WSSDA Hot Topics:
Questions & Answers About Health Insurance
for K-12 Education
HOT TOPICS INDEX
|
New! The Washington Association of
School Administrators (WASA) has compiled a detailed rate comparison
of K-12 health insurance plans. Visit the WASA Web site
to view and download this information. |
|
HEALTH CARE COVERAGE: A GROWING CONCERN |
|
Caught between skyrocketing costs and state budget
cutbacks, school boards around the state are facing hard choices
over health insurance for their employees. Because these choices
could become a major point of contention in labor negotiations,
the WSSDA Board of Directors is urging school board members to be
fully aware of the many factors affecting health benefits and
various options available to address this complex issue.
|
| There is growing concern that last November’s
teacher strike in Hoquiam – which centered on health benefits –
may foreshadow similar disputes in the coming months. Unlike state
employees, K-12 staff can bargain over health insurance as part of
contract negotiations with their respective districts. And the
issue of who pays and how much is likely to be a focal point of
upcoming negotiations. |
|
The information in this section has been prepared to help school
board members better understand K-12 health care coverage and the
challenges confronting school districts over this issue. It is
also intended as a starting point for discussion and exploration
of potential short- and long-term strategies for addressing those
challenges. Board members are encouraged to share their
experiences, concerns, and ideas related to the health insurance
issue. |
| Q.
|
Who
pays the cost of providing health insurance to public school
employees? |
| A.
|
School
districts pay health insurance premiums using
three sources of funding: an appropriation from the state, local
district funds, and out-of-pocket contributions from the employees
themselves. |
| Q.
|
Has
it always been paid for this way? |
| A.
|
No.
Employee benefits were once considered part of the legal
definition of compensation, which in turn defines basic education
– the state’s responsibility. However, the Legislature changed the
law to districts and unions to bargain over
using local funds (derived from levies) to contribute toward
insurance premium costs not covered by the state allocation. |
| Q.
|
How much does
the state provide for health care coverage? |
| A. |
For the current year,
the state appropriation amounts to $455.27 per full time employee
(FTE) per month. The dilemma, according to the state Health Care
Authority, is that this allocation is not keeping pace with
rapidly escalating costs for health insurance plans. While the
state budgeted for 12 percent inflation, costs of medical plans
have actually risen 14 to 17 percent overall, and as much as 22
percent in the area of prescription drugs. |
| Q.
|
What about the cost of health benefits for K-12 retirees? |
| A.
|
The state
requires school districts to pay into a fund that subsidizes
health benefits for K-12 retirees, who now number about 32,000
statewide. This payment, often referred to as the "carve-out," is
included in the state’s per-FTE allocation for health insurance.
Current employees, however, often view the carve-out portion as
money that should be used for their health benefits, not for
retirees’ insurance. Bargaining has resulted in some districts
paying the carve-out from local funds rather than the state
allocation. |
| Q.
|
Why
is health care coverage going up so fast? |
| A. |
A variety
of factors are causing health care and health insurance to climb
significantly both here and around the country. For one, people
are living longer and there is a larger elderly population
requiring health care. Medical technology has advanced
significantly, but it also brings increased costs. And
pharmaceutical costs have risen sharply for a variety of reasons,
including the widespread use of new drugs such as those used to
lower cholesterol and relieve allergies. |
| Q.
|
So
if the state allocation doesn’t cover all the costs, what
determines the amount paid by the district and the employees? |
| A. |
If bargaining results
in coverage that costs more than the state allocation, the
difference must be made up through some combination of employee
out-of-pocket payments and local district funds. The specific
amounts contributed by staff and the district must also be
determined through the local bargaining process. |
| Q.
|
Q.
Which insurance plans are being used by school districts? |
| A. |
Most
districts (264) use a plan offered by the Washington Education
Association (WEA) through Premera Blue Cross; approximately half
of the state’s K-12 employees are covered through the this plan.
Many districts offer a choice of health plans, as agreed upon
through the bargaining process. The Tacoma, Everett, Northshore, and Yakima
School Districts have self-funded insurance plans. |
| Q.
|
Can
districts obtain health coverage through the State of Washington? |
| A. |
Yes. The
Washington State Health Care Authority (HCA) purchases health
insurance coverage for state agencies, higher education, and a few
(about 25) K-12 school districts in the state. Approximately 4,200
K-12 employees and their dependents are currently covered under
plans offered by the Health Care Authority. HCA officials say they
are receiving more inquiries from school districts looking for
ways to keep health insurance affordable. |
| Q.
|
How
do the plans offered through HCA compare to the other plans
purchased by school districts?* |
| A. |
The plans
offered by the HCA are generally less expensive than the other
plans, which tend to offer a broader range and depth of benefits.
It should be noted, however, that the costs of HCA plans for K-12
employees vary depending on the number of staff with family
dependents. This is because the HCA has charged a “tiered rate”
based on the employee’s choice of plan and family size. The
Legislature recently adopted a bill – HB 2536 – which will give
the HCA conditional authority to charge a “composite” rate based
on the average family size in the district. (The composite rate
structure is currently used for state agency employees.) The
change takes effect January 1, 2003. |
| |
*For a
detailed comparison of health plan rates for K-12 employees, visit the
Washington
Association of School Administrators' Web site. |
| Q.
|
Is
there a single statewide plan to cover all public school
employees? |
| A. |
No. In
1993, the Legislature adopted a law that would have included all
K-12 employees in a state insurance pool. This law was repealed
before it was scheduled to take effect in 1995. |
| Q.
|
How
will the state budget crisis affect health care coverage for
public schools? |
| A. |
Health benefits were reduced as part
of the state budget cuts approved by the 2002 Legislature and Gov.
Gary Locke. K-12 employees’ health benefits are now set at a rate
of $457.07 per month for 2002-03, compared to the original
budgeted amount of $493.59. These cuts will put even greater
pressure on local districts to pay for health benefits from local
funds. |
| Q.
|
Do
school districts have an obligation to fully absorb any shortfalls
in health care funding from the state? |
| A. |
There is
no question that health insurance is becoming less and less
affordable, and that means difficult choices for everyone. In the
general economy, employees are expected to share a larger
responsibility for the cost of their health insurance. It is
unreasonable to expect taxpayers to shoulder the entire cost of
rising of health care coverage for school employees. |
| Q.
|
What if a district wishes to switch its health insurance provider? |
| A. |
The
process for changing insurance providers will vary by district,
depending on the relevant collective bargaining agreement(s). If
the change impacts employees in any way, that impact will always
be subject to collective bargaining. |
| Q. |
Health insurance is likely to be at the
forefront of contract negotiations. What can school board members
do to prepare their districts for this process? |
| A. |
The WSSDA Board of Directors is recommending that
school directors take the following steps:
-
Fully analyze your district’s current health
care plans and compare them with other available plans,
including the coverage offered by the state Health Care
Authority. (See the
WASA Web
site for rate comparisons).
-
Explore the collective bargaining issues around
health benefits.
-
Become familiar with how your district pays for
the "carve-out" (i.e., whether the district deducts the
carve-out from the amount set aside for each employee’s
benefits).
-
Monitor legislative action on health benefits
and state funding of health insurance.
-
Discuss health insurance and bargaining issues
with the district’s negotiations leaders in a closed meeting.
-
Be proactive in communicating with the community
about the challenges and choices facing the district in the area
of health insurance.
|
| Q.
|
Where can I get more information? |
| A. |
Your
superintendent can provide details on the status of your
district’s health insurance. As noted above, WASA's Web site
offers a
detailed health plan rate comparison. You may also want to contact the
State Health Care Authority in Olympia at 1-800-700-1555 or visit
the HCA Web site at www.wa.gov/hca.
|
| |
Updated
May 13, 2002 |
|
 |
|
Copyright
©
2008 Washington State School Directors' Association
221 College St. NE • Olympia, WA 98512 • 360/493-9231 |
| |
|
|
|
