Crook schools, workers to share insurance debt
By Rachael Scarborough King / The Bulletin
Published: January 21. 2007 5:00AM PST
The Crook County School District and its employees have reached an agreement about an insurance problem that has saddled the district with at least a $650,000 debt.
A few major claims in the school district’s self-insurance plan in the last year left the county with a bill of $650,000 as of this week, Superintendent Steve Swisher said. As bills from the last months of 2006 continue to arrive in the next few weeks, that debt could rise as high as $750,000.
The debt represents the difference between what the self-insurance plan collected in premiums and the medical and dental expenses employees accumulated. When bills started to outpace the premiums the district’s unions were collecting last year, employees decided to end their six-year-old, self-insurance plan and switch to Clear Choice Health Plans and Blue Cross Blue Shield. But the school district still had to pay for earlier medical expenses, even though money was no longer coming in to the self-insurance plan.
“The problem for the district is that ultimately the school district is liable to pay that bill should there not be an agreement with the employees,” Swisher said.
The district took the money out of its general fund to pay the medical and dental expenses. But it needed to negotiate an agreement with its employees to refund the district.
“There was sort of this moral and ethical discussion,” Swisher said. “The employees chose to go in (to a self-insurance plan) and they chose to leave: Shouldn’t they participate and pay it off?”
The agreement means that employees will have an additional $20 a month deducted from their paychecks and their future salary cap increases will go toward the debt. The district will also contribute reserves of funds from previous years’ budgets.
“The employees and district came to an agreement to share those costs and over the next 18 months pay it back,” Swisher said. “It was a very positive problem-solving process, (even though) there were not good solutions, just some were worse than others.”
Lori Woehl, the president of the teachers’ union in Crook County, agreed that the negotiations went smoothly.
“I thought it was fair to both sides,” Woehl said. “We worked together amicably and everyone’s happy. Both sides are very pleased.”
The district’s employees will now move to larger insurance companies. A self-insurance plan is one in which a group of employees at one company pays premiums into a pool used for medical and dental expenses. That means that the number of people paying into the plan – about 380 in the case of Crook County – is much smaller than with large insurers, and a few big claims can throw the plan into debt.
Swisher said that the use of $750,000 from the district’s general fund, out of an annual budget of about $25 million, should not affect school programs. But it might prevent the district from hiring another teacher.
“We should be able to absorb it without making cuts,” he said.