We've received feedback that all the numbers are confusing. So, in an attempt to try to help clarify the issue, try this...let's look at the 4 classes of employees and see how health insurance changes impact the budget. Remember, there are two factors at work here:- Insurance premium costs are increasing by 3.5%...so the district WILL incur more cost.
- Now all employee groups will pay 9% of their premiums (10% if they do not participate in a Health Risk Assessment program).
28.5 Administrators - 0.86% Savings
In 2010-11, Administrators paid 5% of their premiums (6% if they do not participate in a Health Risk Assessment program).
The cost of premiums is increasing by 3.5%
Administrators are paying at least a 4% higher share of their premium (9% - 5%)
Net effect: 0.5% SAVINGS (Actually it's 0.86% but let's call it a wash for argument sake)
30.4 Administrative Support - 0.86% Savings
In 2010-11, Administrative Support paid 5% of their premiums (6% if they do not participate in a Health Risk Assessment program).
The cost of premiums is increasing by 3.5%
Administrative Support are paying at least a 4% higher share of their premium (9% - 5%)
Net effect: 0.5% SAVINGS (Actually it's 0.86% but let's call it a wash for argument sake)
324 Local 60 (Support) Staff - 3.5% increased cost
In 2010-11, Local 60 already were paying 9% of their premiums
The cost of premiums is increasing by 3.5%
0% savings from increased share of premium costs.
Net effect: 3.5% INCREASED COSTS
561 SPEA (Teaching Staff) - 4.57% Savings
In 2010-11, SPEA members paid only 1.3% of their premiums.
The cost of premiums is increasing by 3.5%
SPEA are paying at a 7.7% higher share of their premium (9% - 1.3%)
Net effect: 4.2% SAVINGS (Actually it's 4.57% )
The first $212,418 of health insurance budget fluff
So...clearly, the savings outweigh the increased costs...right? Therefore, there's no way that the budgeted health insurance premiums (line 240) can be MORE than what we spent last year... we should be able to agree on that, right?
That means that since we spent $8,100,185 for 2010-11 and we're budgeting $8,322,603 for 2011-12, then we can take $222,418 right off the top.
SPEA Members yield the most significant savings
Last year the cost of health insurance premiums for SPEA members was about $6,500,000. The district's share of that cost was about 1.3%, or $6,415,500 Using our basic math, we can adjust the base cost for the 2011-12 premium rate increase (3.5%). $6.500,000 X 1.035 = $6,727,500. The district's share of that cost for 2011-12 is 91%, or $6,122,025. The difference between the district's cost for 2010-11 vs. 2011-12 is a savings of $293,475
Add in increased costs for Local 60 members
In 2010-11, the district paid about $3,500,000 for Local 60 health insurance. Since Local 60 has been paying 9% all along, there is no savings. We do, however have to factor in the additional district cost for premium increases, With a 3.5% premium cost increase, the district will bear an additional $122,500 in costs for 2011-12.
Now add in the health insurance costs for staff additions
The district (obviously) didn't pay anything for the cost of new staff additions added for 2011-12 so these costs must be considered and subtracted from any net savings. The budget documents made available to the public to date indicate that 14 new staff will be added based on projected enrollment increases. Just as obviously, if actual enrollment exceeds projections, this number may increase.
Adding it all up, it appears that there is about $220,000 more than necessary budgeted for health insurance.
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