Happy and Healthy
Keeping health costs under control
The art of keeping insurance costs down without inflaming your faculty
Health insurance costs rising faster than your budget? You’re hardly alone.
Ninety-five percent of school business officials surveyed by the American Federation of Teachers in 2005 said they were in the same boat.
This means that, if your employees negotiate benefits at a district level, you’re likely in the unenviable position of asking them to pick up a greater share of their healthcare costs—either through an increase in their share of the premiums or higher co-pays and deductibles. Follow these tips to avoid mutiny.
1: GET THE BEST DEAL Pay less in premiums, and you’ll be doing both your employees and your budget a favor. But how? The Michigan Association of School Administrators and the state American Federation of Teachers (AFT) teamed up to support a recently passed law that gives all school districts access to their insurance claims data. (Another large teachers’ union, the Michigan Education Association, opposed the legislation.)
William Mayes, executive director of the administrators association, says the data will help districts seek more competitive bids for plans. “This will help to drive costs for school districts down,” he says.
In Rhode Island, teachers’ unions are working with the state school committees association to create several statewide insurance plans, in the hopes that costs will go down when the claims risk is spread out over a larger population. “We think our purchasing power will increase dramatically,” says Marcia Reback, president of the Rhode Island Federation of Teachers.
Rachel Drown, an assistant director in the AFT’s national research department of the, says districts should set up joint labor/management committees to develop a plan to drive down costs. Strategies can be as simple as changing a plan so that it only covers generic drugs, or raffling off iPods to employees who voluntarily undergo screening for diseases that can be treated with preventative care, such as diabetes. “You need to develop a plan based on your claims data,” Drown says. “You can’t just piecemeal it.”
2: BE UPFRONT
If you’re asking your employees to take a benefit cut, you have to explain why it is necessary. A simple way to do this is to show them the numbers. John Artis, superintendent of Dearborn Public Schools in Michigan, made sure his teachers knew what was on the line at contract time—without changes, 60 of them would be laid off. Instead of teacher pushback, he says, “our negotiations were really a mutual process.” No one wanted the layoffs or the increased class sizes that would accompany them, and the teachers knew something would have to give. They insisted on keeping their benefits intact, but they agreed to a zero-percent raise and a zero-percent step increase to make that happen.
3: DON’T CLING TO PERCENTAGES
Reback says some teachers’ unions in Rhode Island have pushed for a flat contribution rate toward their premiums, instead of agreeing to pay a percentage of the premium. It’s a more attractive option to teachers, she says, because they know their payments won’t be tied to unpredictable premium prices. “With the teachers paying a flat rate, they know exactly what’s going to come out of their pockets,” she says.
On the flip side of that, Mayes says some districts in Michigan are setting caps on what they will pay toward an employee’s healthcare each month. Under this system, teachers can still choose from an array of plans, but they’ll be picking up more of the costs of more expensive plans. Although some districts in Michigan still pay for 100 percent of teachers’ health insurance, Mayes predicts that the trend of asking employees to foot a portion of the bill will continue. “That will be the thing of the future.”