As a way to rein in medical expenses, the East Baton Rouge Parish School Board agreed Thursday that new employees need to work substantially longer before they can retire and continue to enjoy partially or fully paid health insurance.
The School Board also agreed to no longer allow board members to stay on the district's health insurance after they leave the board.
Neither change applies to current employees or board members. Rather, they apply to new employees hired after Jan. 1, and School Board members elected or appointed in the future.
With little discussion, the School Board voted 8-1 in favor of the proposal. Only Board Vice President Tramelle Howard voted no.
Howard expressed concern that increasing the number of years employees need to become vested will make it more difficult to hire teachers in the future.
"To me it could be something that puts us at a disadvantage," Howard said.
The proposed employee benefit changes did not come from the office of Interim Superintendent Adam Smith. Rather, Board President Mike Gaudet sponsored the proposal. He said he’s been nursing the idea for several months.
“I’m trying to bring (our benefits) more in line and make them more realistic,” Gaudet said.
School officials surveyed local school districts, as well the state-run Office of Group Benefits, and found that East Baton Rouge Parish offers among the more generous benefits in the region when it comes to when employees can retire with full medical insurance.
Gaudet’s plan reverses that and make the school district among the least generous in the region.
Currently, East Baton Rouge Parish school employees can retire and keep their full medical coverage after 10 years on the job. For employees who retire with between six and nine years of employment, the school system will pay between 20 and 80% of the employer portion of the monthly premiums.
Starting Jan. 1, new employees won't be fully vested until they've worked at least 20 years with the system and only if they are at least 55 years old. Employees who retire with 10 and 14 years of experience will have 30% of their employer premiums paid, while retirees with 15 to 19 years will see 60% of those premiums paid. Finally, retirees with 20 or more years of experience but who are not less than 55 years old will have 80% of their employer premium paid.
The benefit levels that Gaudet devised are similar to the levels offered by the Office of Group Benefits, which many school districts participate in. The state agency, though, allows retirees with fewer than 10 years of experience to draw minimal benefits.
Gaudet, who retired in 2014 as a vice president from Albemarle, said public sector employees stand out in offering this kind of benefit at all.
“Most private employers no longer provide health insurance benefits after retirement for new employees,” Gaudet said.
Gaudet said it’s not clear how much money the change would save and that it will be awhile before any savings are realized. Any such savings he'd like to put into raising teacher pay, he said.
“It won’t provide any benefits for at least five years,” he said. “So it’s not going to be balancing any budgets.”
The only other person to speak on the issue Thursday was Rex Bowdin. Bowdin served as the school district's benefits consultant in 2004 when these rules were last changed.
"Back then, an employee could come in and work for three months and retire (with health insurance)," Bowdin recalled.
Bowdin applauded the latest change, saying "it's absolutely correct."
As far as health insurance for School Board members, Gaudet is hitting on an issue that has been used against board members for years at election time.
Currently, board members can be vested after just eight years of service. Gaudet would let new board members participate in the insurance plan, but bar them from staying on district insurance after they leave.
Retiree medical coverage — worth an estimated $8,000 to $9,000 a year for families — is one of the few perks of serving on the School Board. Considered a part-time job, School Board members are paid only $9,600 a year; the board president earns $10,800 a year.
Gaudet said he has no interest in applying the change to current board members.
“We should not go retroactive,” he said. “People have already made life plans based on this.”