Teacher insurance ‘fix’ could cost Fort Smith schools $250,000 a year or more

Fort Smith Public Schools Superintendent Dr. Benny Gooden told the district's school board Monday (June 23) that should a special session take place to address teacher insurance costs, he fears whatever solution passes out of the General Assembly could put the district on the hook for more than $250,000.

There are two proposals being floated as a fix for the rising teacher insurance premiums, as reported by The City Wire content partner Talk Business. One would remove part-time school employees who work less than 30 hours from eligibility.

In the other bill, employee spouses who have health coverage through another group health plan would not be eligible for school and state benefits. The bill also would require verification of dependent eligibility. It would require employees with high-deductible plans to be enrolled in a health savings account. It also would provide more flexibility in covering gastric bypass and other bariatric surgeries.

“The governor is satisfied with them. Now it’s about the vote count,” Matt DeCample, spokesman for Gov. Mike Beebe, told Talk Business last week.

But Gooden said the proposals are not satisfactory to him and do not address the cause for the spike in premiums.

"We're certainly not pleased with the proposals as they are, but as I've been told, 'Get over it. That's probably what you're going to get whether you like it or not.' My concern is what they're proposing does not address the root problem of the teacher/school employee health insurance plan because the root problem is we don't have a healthy mix of plan participants.”

He defined a healthy mix as "young and healthy.”

"We have too many people who do not take the insurance who are young and healthy, and us old and those sick people always take it and that's not good for the plan. That's not what group insurance is based on. They're not doing anything that in my view would induce more people, more young people, to take that program.”

Gooden said the plans will push more of the burden to the school districts which adversely impacts large districts with high health insurance participation rates.

"Their solution is to find some money and don't spend any more state money and have the schools put it up and we're concerned about they way their doing it because they're going to detrimentally affect school districts like Fort Smith who have a high participation rate already.”

He said Fort Smith's participation rate is at about 85%.

Just in the case of Fort Smith, Gooden claimed the district would be on the hook for between a $250,000 and $300,000 increase in costs when it comes to teacher health insurance premiums. Asked after the meeting where the district would get the additional monies to fund its obligations should either of the bills gain approval, Gooden said it could come from district staff's future pay raises.

"The next time we come up with salary negotiations … let me just give you a made up number, but let's say the amount of money we have to send in, that might be $200 we couldn't put on a base salary for all employees because it could be $200,000 or $300,000. So you're talking about a lot of money.”

Gooden said whatever the legislature decides, should a special session be called, it would not have an impact until next school year since "obviously the money's already committed right now.”

"All we can do is just watch because I've pretty much been told no changes will be made at this point," Gooden told the school board.

In other business, the school board:
• Approved increasing the cost of school lunches by 25 cents, to $2.50 per meal at secondary schools and $2.25 at elementary schools;

• Approved the offering of free school breakfast to all Fort Smith students beginning with the 2014-2015 school year; and

• Approved an agreement with Mitch Llewellyn for legal services to be provided for the district from July 1, 2014, through June 30, 2015, at the rate of $200 per hour.