Curmudgeon's Corner

cur-mud-geon: anyone who hates hypocrisy and pretense and has the temerity to say so; anyone with the habit of pointing out unpleasant facts in an engaging and humorous manner

Village Buzz - March 9th

Village Buzz, School Board, Political, Quality of Life

This blog amplifies the information in the last Village Buzz; it deals with the cost of most of the benefits for the Germantown School District.  Current bargaining agreements require that the WEA Insurance Trust (WEAIT) be the sole source for insured benefits.

The cost of family health coverage from WEAIT for the current fiscal year is some $23,515 for the full year or about $1,959 per month.  Of that amount, the recipient pays 3%, or about $705 per year or nearly $59 per month.

The cost of single health coverage is about $10,347 per year or some $862 per month.  The recipient pays nearly $26 per month as his or her share of the cost.

The cost of family dental coverage from WEAIT is about $1,367 per year or some $114 per month.  The recipient pays 5% of that or some $5.70 per month.

The cost of single dental coverage is about $533 per year or slightly more than $44 per month.  The recipient’s share of that cost is about $2.22 per month.

Long term care coverage is paid at 100% by the District and that cost comes to nearly $866 per employee per year.

Having been in the employee benefits business world for a long time, I see the costs of other employers on a regular basis.

I know of no other employer in the private sector that pays anything remotely approaching these costs for health and dental coverage.  There may be a few, but I’ve not seen them.  Similarly, I know of no private sector employer that requires such low cost-sharing from its employees.

The plan design that drives such costs is essentially: “plan pays most everything with a few modest co-payments required”.  This kind of plan design invites high patterns of utilization and that drives future costs up; it becomes a self-fulfilling prophecy.  As the phrase goes, if employees have “skin in the game” they become better consumers.  These kinds of plans do not cause employees to have “skin in the game” to any measureable degree thus promoting useage that might otherwise have been avoided or reduced.

If we look at a young single teacher just beginning his or her career at Step 1 – Division 1, the combined cost of salary, health, dental and LTC benefits amounts to some $46,224 per year.  If that same teacher were married, the amount climbs to some $59,789 per year.

If we look at a senior teacher at the maximum Step 14 – Division 6, those numbers become $84,182 for a teacher with single coverage and $97,747 for a teacher with family coverage.

These illustrations do not take into account contributions for retirement funding.

The budget bill, at least as currently proposed by Governor Walker, would permit school districts more latitude in their negotiations with the union members in order to reduce costs so that taxes could be held in check or lowered.  Given the current state of affairs in our state’s politics, it is difficult to predict what may finally emerge.  If the per student aid numbers are to be reduced as indications suggest, it stands to reason that some of that impact has to come from that section of the district budget that represents the lion’s share of expense.  That is the human cost sector; people and benefits.

If the benefits could be sourced from firms in addition to WEAIT and/or using different plan designs, I would not be surprised if reductions in cost could be had with relatively little benefit degradation and that salary levels could be affected to a lesser degree than may otherwise be necessary

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