ELYRIA – The current health insurance program of the Elyria Schools is bleeding the district dry, administrators say.
One week after the Elyria Schools teachers union shot down a proposal that would have employees paying more for their health insurance, board members learned that the current health plan is no longer financial feasible and is stripping the district of money it set aside to pay the bills in 2013.
“We are out of money and are living off of tomorrow,” Treasurer Fred Stephens said.
Unless something is done now, the district will face a deficit in 2013, Stephens said.
This is not news for board members.
In March, Stephens presented a five-year forecast to board members telling them that the 2013 deficit hovered around $10 million and, in order to significantly reduce that figure, big budget cuts needed to be made. Board members decided to close two more elementary schools and more teachers were laid off.
The actions resulted in the deficit being reduced to about $4 million, but it still exists.
At that time, school officials also knew they had to get a handle on health insurance spending. If not, closing the schools and reducing teachers would have been in vain, because the rising cost of health insurance would still leave the district`s budget in the red.
On more than one occasion, with the most recent time coming roughly four weeks ago, a
$1 million advance into the health insurance fund was needed just to ensure all the health claims in the district plan could be paid.
Elyria Schools is a self-insured district that spent roughly $7.5 million on health care for its employees in 2008, but that figure is expected to jump to more than $8 million by July 1.
That`s why on May 13, teachers and staff members were presented with a plan that came about after months of work by the health insurance committee to make the fund more self-sufficient.
Superintendent Paul Rigda said there was hope that teachers would begin picking up the extra cost, given the state of the school system`s finances.
The proposal would have had the district`s more than 900 employees contributing about 12.5 percent of the total health care cost.
Currently, the district offers a three-tier health care program where individuals pay $10 per month – 2.5 percent of the total cost – and have a $250 deductible.
Employees carrying either a child or spouse on the insurance with them pay $20 a month, and family plans are $30 per month. The family deductible is $500.
The proposed pay structure would have increased the $10 monthly contribution for an individual to $52.43 and the $20 or $30 monthly contribution to $132.43 per month per family.
The teachers union dashed those hopes with a vote of no, which left the district contractually obligated to pay the brunt of the plan.
The Elyria Education Association`s new leader, Sarida Volante, said the vote was not an unequivocal rejection.
“We did not say no,” Volante said after Wednesday`s meeting. “We would like to reserve the right to bargain the issue with the rest of our negotiations.”
The increase would have placed Elyria employees on par with others across the state and country, district officials said.
Contact Lisa Roberson at 329-7121 or email@example.com.