The Winona Area Public Schools Board of Education approved an employee health insurance package for 2013 that will cost the district nearly $400,000 more than in 2012.
The increase is an 11 percent increase over the 2012 rates. District 861 Human Resources Director Pat Blaisdell explained that an agreement with Blue Cross Blue Shield put a limit on the 2013 increase of 12 percent. The district was able to negotiate the 11% rate with the provider.
The total increase from 2012 was about $480,000. Blaisdell said that, as specified in union contracts, the district must pay for increases in single coverage plans, but employees who choose family insurance plans must pay a portion of the increase. About 80 percent of district employees choose single coverage plans, thus the district must pay for the majority of the premium increases.
It is important to note, said Blaisdell, that the district is required to offer a certain level of benefits under the plans, as defined in union contracts, and cannot adjust the insurance plan benefits or employee cost without negotiating those changes with the union.
Five unions are expected to begin contract negotiations within the next few months.
Blaisdell told the board that the 11 percent increase was a bit higher than the increase last year, adding that over the last decade, medical insurance increases have been “all over the board.” The district has seen increases as high as 18 or 19 percent, she said, and in some years it has been much less. The district is currently paying more than $4 million annually for employee medical coverage.
Board member Gary Shurson asked whether the district negotiates insurance contracts within a state association, adding, “These rates look extremely high to me.”
Blaisdell explained that the district works with Winona Agency to get quotes and bids from its service cooperative, and the district typically negotiates to find the best price. School districts are required to solicit sealed bids for medical insurance every five years, she added, but District 861 does it more frequently—every year, or at least every other year.
Board member Ben Baratto said that the state teachers’ union, Education Minnesota, has talked of a statewide plan for public school employees, which could make it easier to negotiate a better price from insurance companies. Each district has different insurance plans for employees, “It’s never gone anywhere because of that,” he said.
Board chair Greg Fellman, who works in the health care industry, said in his opinion, the rates were not high.
The district insurance committee recommended that the board approve a renewed contract with Blue Cross Blue Shield. That committee includes union representatives, finance office officials, administrators and Fellman.
The board has been working on a plan to cut $500,000 from the district budget for the next three school years, and has received an administrative recommendation for the way that those cuts should be identified. Superintendent Scott Hannon has asked that an administrative committee be charged with coming up with a list of recommended budget cuts. No board member would be on the committee, and the full board would be presented with the recommended cuts for final approval.
Board member Mohamed Elhindi has attempted several times to include board and public participation in the work to identify recommended cuts. During the meeting Thursday, he asked for a bit of time at the next board meeting to present an idea that would build on that recommended administrative process.
Also expected at the next regular board meeting is a “state of the district” presentation on district finances. The most recent audit report has been completed, offering district officials more solid numbers for fund balances. More exact figures on how much the board must cut from the district budget over the next several years are expected to be presented, along with an overview of district finances.