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AISD employees see insurance hikes

Wednesday, August 31, 2016 by Courtney Griffin

The final board of trustees meeting attended by Austin Independent School District’s Chief Human Capital Officer Michael Houser brought hard news: Some AISD employees could see a significant portion of their newly approved raises go toward paying increasing health care costs.

Houser, who retired after Monday’s regular meeting, told AISD trustees that staff reviewed employee insurance plans in May. The process began late in the budgetary planning process because AISD’s insurance contractors must review employees’ utilization of insurance before establishing new rates, he said. Through the review, staff realized that AISD’s Accountable Care Organization insurance plans – which include Aetna Insurance Company and the local Seton Family of Hospitals – would carry a higher price tag in 2016-2017 than in the previous school year.

“There was about a $15 million gap on the anticipated expenditures for employee health insurance that would take us up to 2017,” Houser told trustees Monday. “There was a need to figure out how to resolve the $15 million deficit in expenditures.”

In partnership with the Education Austin teachers union, Houser was able to negotiate the final price tag for AISD’s insurance plan down from $89 million to $83 million, with the district committed to carrying $70 million in costs and passing off $13 million to employees. Employee plans and rates will remain the same until January 2017, when the new rates begin. Depending on the plan, some employees’ contributions will not change, although deductibles, co-payments and benefits might, he added.

“I know that the insurance will continue to be a mystery that has to be unfolded each year. We need to be careful so we shop each penny very, very wisely,” Houser told the trustees, adding that AISD will send out requests for proposals this fall to see if it can land a more favorable health insurance contract.

Board Vice President Paul Saldaña said that about 3,300 employees – employees on one of AISD’s two “Gold PPO” plans – will be the most affected. Saldaña stressed, however, that the district needs to educate employees before the October enrollment period because most employees’ coverage, deductibles and co-payments will rise and shift.

Saldaña, who asked for a breakdown of the numbers prior to Monday’s meeting, said many of the affected employees on the Gold plans earn less than $55,000 a year. He added that some teachers will see a 49 percent-per-month increase in their contributions to health insurance, and other workers could see a 77 percent increase. Continuing to break down the differences in benefits, Saldaña added that employees whose children might have special needs – such as occupational therapy – could now end up paying hundreds of dollars out of pocket per month for those services.

“I know we work very hard, and we hear time and time again that we have teachers who have to donate plasma, that we now have teachers qualifying for subsidized housing and food stamps,” Saldaña said. “We offered our employees an across-the-board 4 percent (salary) increase, and this is going to take that and then some.”

In the latest budget cycle, AISD committed to some of its largest voluntary expenditures, a $20 million increase for employee raises and a $1.2 million increase to raise the district’s minimum wage to $13 an hour. In its largest involuntary expenditure, however, AISD sent $406 million in local property taxes back to the state as part of Texas’ Robin Hood school financing system. Under the system, the state takes money from property-rich districts and redistributes them to property-poor districts. AISD is the state’s largest contributor.

“I want to put this in a larger context,” added District 3 Trustee Ann Teich, in reference to the taxes sent back to the state. “I think it behooves us to remember these are conditions we don’t have control over. And it’s obscene … that we in this district have to do these types of things.”

District 5 Trustee Gina Hinojosa congratulated staff and Education Austin on the small victory of negotiating a deal that allowed the majority of AISD employees’ paychecks to remain the same even after having an additional $15 million gap to fill.

The board approved the insurance contract unanimously and asked staff to notify it sooner of possible increases going forward.

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