The Groveport Madison Board of Education agreed unanimously Oct. 12 to implement a self-funded health insurance plan Jan. 1, but representatives from two unions say they fear the move will negate gains made in recent contracts.
The district currently has a fully funded health care plan with Anthem Blue Cross Blue Shield that went into effect in August, just two months ago.
District Treasurer John Walsh said the district will continue to pay 90 percent of the cost of premiums and employees will pay 10 percent, just as they do now with a fully funded plan. Anthem will still be the insurance provider, he said.
Groveport Madison Local Education Association President Joy Bock said teachers are concerned that the move to self-fund insurance would go against terms of a new four-year agreement the union signed with the district in August.
"GMLEA took six years of zeroes and two pay-step freezes to put the district on solid financial footing," Bock said. "We then went into negotiations -- negotiated in good faith -- not asking for those steps or any of that money back.
"We did that knowing that we had kept our insurance and now to find out halfway through a four-year contract you're wanting to make this change is concerning to us," she told the board.
Walsh said the district pays roughly about $13 million for health insurance.
Figures provided by the district indicate that most employees pay $89.82 per month for a single plan while the board's cost is $808.35.
For a family plan, most employees pay $221.42 per month and the district's portion is $1,992.77.
District Communications Director Jeff Warner said there is nothing in the negotiated agreement with the GMLEA that prevents the board from going from a fully funded health care plan to a self-funded one.
Bock said teachers are also concerned that this new funding model is being rushed and could mean higher premiums. As part of the union's negotiations, Bock said insurance caps were taken out of the contract.
"We have been assured by Anthem and our underwriters that the fear of rate increases on Jan. 1 is unfounded," Walsh said.
However, he said, rates will most likely go up in August when the district has its normal rate renewal.
"Over the last two rate increases we received, one has been 14 percent and one was 11.35 percent, so that is 25 percent in two years -- which equates to probably almost $3 million of increased costs for insurance," Walsh said.
If rates do go up in August, he said the current 90-10 board-to-employee insurance cost split won't change.
In case of catastrophic illnesses, the district is also buying stopgap or reinsurance -- "insurance on the insurance" -- with Anthem, which is already built into the rate structure on the health insurance premiums, he said.
Brian Booth represents OAPSE Local 312, a union for the district's cooks, custodians, aides and maintenance workers. He said said they were surprised by the proposal to move to a self-funded plan.
Booth said he is concerned the new model could take away any pay gains union members finally received.
"We're some of the lowest-paid custodians, maintenance workers and aides in the city," he said. "We just can't afford another increase on our insurance. We would be going backwards -- giving back our raise for the increase.
"We just don't understand how this is a win-win for Groveport," Booth said.
Walsh said being self-insured will save the district money.
"The underwriters and Anthem calculated the savings to be about 17 percent, if we would have done this two months ago," he said. "Over a 12-month period from Jan. 1, 2017 to Jan. 1, 2018, our cost to run our health insurance would have been lowered by 17 percent. That's upward to about $2 million in savings."
He said being self-insured means the district takes on risk, "but it also gives us control over the plan and give us the ability to mitigate rate increases."