Central public school employees will have to pay $200 more a month for their health insurance this coming year to keep a spouse on their insurance if their spouse is eligible for insurance from another large employer.
The change is one of many the Central School Board unanimously approved Monday to contain costs for employee medical coverage. Most changes take effect Sept. 1.
The changes are prompted by general inflation in health care costs, as well as a requirement under the federal Affordable Care Act that large employers such as Central offer insurance that costs employees no more than 9.5 percent of their household income.
Superintendent Michael Faulk emphasized that these changes are the recommendations of an employee-led insurance committee that has worked on the issue for weeks.
He also said some of the increases will be offset by modest pay raises he’s including in the budget for 2015-16.
After two years using Louisville, Kentucky-based Humana, the board agreed Monday to switch to United Healthcare, headquartered in suburban Minneapolis, as the provider for Central schools. United Healthcare submitted the cheaper of the two proposals, as well as the one the employee committee judged to offer better benefits.
Gavin Vitter, director of personnel services, said UnitedHealth taking over is going to mean premium increases, but they vary, on average, by plan: 4.7 percent more for a midrange-deductible “point-of-service” plan; 9.6 percent for a high-deductible plan; and 13.5 percent for a no-deductible “simplicity” plan.
“It affects each tier differently,” Vitter said. “That’s not a bad increase, considering.”
To keep premiums down, Central is having employees pay $200 more a month to keep their spouses on school insurance under the assumption those spouses can get insurance through another employer. The $200 increase will be waived for employees who file a notarized affidavit declaring their spouse does not have any other option. Those include spouses who are self-employed or who work for small companies with fewer than 50 employees. If this affidavit is found to be inaccurate, the employee can be fired.
Central is estimating that 6 out of 10 employees will shift their spouse to different health care plans and off the school system’s plan.
Another change, connected to the Affordable Care Act, will benefit some of the lowest-paid employees. Employees of school districts the size of Central should not have to pay more than 9.5 percent of their household income on the health insurance benefits. To comply with that law, Central is agreeing to pay $42.50 more a month for the 21 employees who would otherwise fall into this category. If Central hadn’t done this, it would have had to pay a $3,000 annual penalty per employee.
“The penalty is far greater than the amount you would have to own up to,” Faulk said.
Retirees also will see changes. As of Wednesday, new retirees who are Medicare-eligible won’t be able to stay on the school district’s self-insured plan and will have to get their primary insurance through Medicare. Those who already have retired can stay with the school system plan.
Faulk said he is still researching the best approach to take for supplementary insurance, such as prescription drug benefits, for Medicare-eligible retirees. He said Central would like to give each of these retirees some extra money to shop for Medicare supplementary insurance, but he’s not sure how much is the right amount.
In another matter, the board voted 4-2 to seek bids from groups interested in preserving and restoring the old Central High School girls gym built in 1927. They will have 30 days to propose a plan for the old gym in the form of a lease. If no one bids, the gym will be torn down, probably sometime in August.
The vote is the culmination of months of discussion since September, when a group of history-loving residents who call themselves the Central Cultural Foundation raised $10,000 to stop the old wooden building’s imminent demolition. The board gave them several months to come up with a viable plan to refurbish the condemned gym.
Board members Roxanne Atkinson, Sharon Browning, Ruby Foil and Jim Lloyd voted “yes.” Board members Willard Easley and Jim Gardner voted “no.” Board member David Walker was absent.
Easley said he thinks the gym should be demolished, noting that the land the gym sits on is not restricted to educational use, unlike first thought.
Follow Charles Lussier on Twitter, @Charles_Lussier.