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111502 Health insurance claims could be $1 to $3 million over budget
By FRANK NARDOZZI
As negotiations on a new teachers' contract proceed behind the scenes, the Bedford Central School District reported this week that the costs of its self-insured health insurance program are skyrocketing.
School Board Trustee Mark Slivka,
the
chairman of the board's finance committee, told the board at its meeting
Wednesday that employee health insurance costs over the first four months of
this school year were 45 percent higher than for the same period last year.
Prescription costs are up 9 percent and medical claims are up 73 percent, he said, including an unusually high number of cases of catastrophic illnesses - nine cases as compared to three last year.
If the current rate of payments continues for the entire year, the cost of health insurance could be 11 percent or 12 percent over budget, Mr. Slivka said, or about $1 million.
If the rate of payments increased to stay at 45 percent higher than last year's, the total amount of expenditures could reach as high as $3 million over budget, he said.
Mr. Slivka said that the district would have to find some way to pay for the medical claims that it is legally bound to pay for under contract with its bargaining units including the CSEA, the school administrators and the teachers' union.
Some of the sources that could be tapped include a $400,000 employee benefit reserve fund, the district's $1.4 million to $1.5 million contingency fund, as well as funds available from expenses not realized or revenues not expected under the current school budget.
Assistant Schools Superintendent Mark Betz said that higher medical costs, including prescription drugs and hospitalization, were driving insurance costs up by double digits in many other school districts as well.
Mr. Betz said that while the district can run a fund balance of up to 2 percent of its total budget, the self-insurance plan cannot do the same thing.
Under current contract terms, the school district charges its teachers and administrators a flat fee contribution in the health insurance program - $250 a year per family and $100 a year for an individual. These contributions do not vary with any increased costs of the program, Mr. Betz said.
Like other insurance programs, the district has deductibles for medical services and charges for a whole schedule of co-pays.
However, insurance claims Submitted to the district have steadily increased in cost over the past several years rising by about 40 percent over the last three years alone.
Mr. Betz said that this growth in health insurance costs was a national phenomenon being experienced by private companies, as well, with costs to larger employers rising between 18 percent to 20 percent, and the costs to smaller employers rising 35 percent to 45 percent.
The new three-year CSEA contract, which went I into effect it January of . regarding health insurance benefits. The union agreed that all of its members hired after Jan. 1, 2002, would contribute 5 percent of all health insurance costs based on the previous year's total, the increase in enrollment and other actuarial data. There had previously been no requirement for CSEA employee contributions.
While declining to be specific, Mr. Betz said that health care costs are a "prominent issue" - in the ongoing teachers' contract negotiations, which have been conducted in private by school district and Bedford Teachers Association representatives since June.
According to contract terms, health benefits for the school district administrators' group and the CSEA are tied to whatever the teachers' union agrees to in its new contract.
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