Journal Sentinal Online Dec. 6, 2011
The least expensive of three options to encourage employees to opt out of the Muskego-Norway School District health insurance plan has won the approval of the School Board. The district will continue to pay employees 87.4 percent of the premium for single coverage if they take insurance from the employer of a working spouse. That will come to about $6,900 next year. The $784,785 cost of the opt-outs is sizable, but the program has been shown to actually save money for the district, said board member Brett Hyde. In a full year, the opt-out plan would avoid nearly $1.5 million in premiums, leaving a net savings of $673,560, said Scot Ecker, director of business services.
Of the 36 area districts in CESA 1, 23 give opt-outs ranging from $9,216 in Shorewood to $3,000 in Mukwonago and Cudahy, Ecker said. Of the 23, Muskego's $8,676 this year is fifth highest. The median opt-out is $6,000.
Least Expensive Option?
Really? REALLY? Um....just spitballin' here...but wouldn't the least expensive option be to pay them ZERO? After all...that's tax dollars we're talking about. So...um...we don't think so.
Cost Avoidance?
We always love the term "cost avoidance". Suddenly we go from "avoiding" costs to realized savings. What happened to the word POTENTIAL? After all...how many families do you know where both spouses select the family insurance from their respective employers. Herro...McFry....those benefits usually COST the employee something out of pocket...right? Who in their right mind is going to pay double the amount of out-of-pocket cost to have TWO insurances, which ultimately does very little to lower one's personal out-of-pocket costs? Especially school districts, which generally have really excellent health plans. And then you have to deal with the issue of who is the main carrier and then they want to charge a chunk to the "secondary" carrier. We have never met a family that enrolls in TWO family plans. So let's not kid ourselves...we're not "avoiding" any costs at all.
Is it a Win-Win?
Payments in lieu of taking insurance is most definitely something right out of Dr. Feelgood's game plan. It's a nice thing to do to offer employees some benefit instead of watching empty-handed while co-workers receive a benefit with real dollar value. That benefit can easily amount to as much as $1,000 per month--or more.
What does the district get? Well....in Sun Prairie a family health plan costs about $16,000. The district typically pays about 91%, or roughly $14,200. It costs the employee about $1,400 per year. Currently SPASD offers a benefit of $300/mo ($3,600/yr) to employees who opt not to enroll in a health insurance plan. So, in our case, we--the taxpayers-- pay these employees $3,600, when POTENTIALLY we could be shelling out $14,200 each. Looking at from only this angle, it looks like a no-brainer for us to offer this option.What we're forgetting, however, is this: if the employee did NOT stand to gain $3,600 (i.e., pay them $0 for opting out), what's the likelihood that they would then choose to enroll in the insurance? Many of the 75-100 employees who receive this cash benefit have spouses that work in the district (or the state, or a municipality). They already are receiving equivalent health benefits. Now, it is possible that, in the absence of the "opt out" benefit, some may drop the spouse's insurance and choose the district's. Would those employees whose spouse work in this (or another) district simply choose to enroll in the insurance as a giant "Nyah Nyah!"? Not when that "Nyah! Nyah!" costs them $1400 per year (or more).
Does it make sense?
Certainly offering payment to employees in lieu of enrolling in insurance is a fairly common thing. The amount, however, is considerably variable. We've only looked at school districts. State employees, for example, are not offered this benefit. Neither are most municipal employees. We're aware of such plans in the private sector, but they generally offer much less (we hear as low as $50/month).
But in this economy, people (ahem...board members!) need to start getting real about benefits that the taxpayers can no longer support. Or you may find yourselves very unhappy when you go to referendum. A school district is not a Koch Brothers' private sector venture.
What could we do with $270-300,000 annually if we eliminate the benefit?
Obviously, the possibilities are endless. We could give it all back to the taxpayers to lower their property taxes. OK...forget we said that; a majority of the current board would NEVER do that.
It could fund, in future years, 50% or more of the "6 initiatives" introduced in the 11th hour of the budget process. Or....we could apply it to the salaries line and raise the entry wage paid to teachers. Wouldn't that be a nice, zero net cost way to make SPASD more competitive in hiring? Of course, if we do that, someone needs to seriously start talking about establish a cap on pay.
Or we could give half to the taxpayers and use half to improve the starting pay for teachers.
Will Sun Prairie Employees Want More?
As word gets out that other districts shell out, on average, $6,00 per year ($500/mo), will SPASD employees feel like they've gotten the shaft? That is indeed the question. Stay tuned.
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