Doing things the “old fashioned way” can be interesting, unusual, and sometimes even fun. On other occasions, though, doing things the old fashioned way is stupid, inefficient, and downright ridiculous. If you have a horse and a car and you need to get somewhere fast would you ride the horse to get there? We are saddling up the horse right now in the Escambia County School District with respect to how we are responding to a financially urgent situation.
Employee benefits provided by the Escambia County School District are self-funded, to the tune of roughly $40Million yearly, which many people involved in benefits consulting believe is the most cost-effective way for an organization to handle employee insurance. A part of the mechanism which allows our district to be self insured is our Employee Benefit Trust Fund. Each year, the Escambia County School District Risk Management Department collects premiums from employees, pays claims (via a third party administrator) and deposits and debits these monies through the Employee Benefit Trust Fund. The district analyzes this Employee Benefit Trust fund annually and then proposes plan changes and premium adjustments to maintain the viability of the fund and also to ensure that the fund balance ends each year with an amount equal to two month’s worth of claims—approximately $6 Million Dollars.
Unfortunately, the 2011 year thus far has been disastrous in terms of our benefit trust fund revenue when compared to expenditures. We have had reduced revenue and a spike in serious injuries/illnesses among a number of employees such that the trust fund is hemorrhaging money every month. On its current trajectory and with no modifications to the benefits-the fund’s balance is projected to be well short of established minimum levels. Significant changes to the plan are going to be mandatory for the 2012 year, we have been told.
So, a few years back the school board developed a benefits committee approach to making plan changes yearly, which was incorporated into the master contracts of our organized union employees. The committee approach has been useful in shortening the bargaining timeline in years where premiums must be altered. The language that describes the makeup of the benefits committee also has language which spells out expedited impasse procedures should everybody not be in agreement. And these procedures will soon be followed.
Because of the disastrous claims year we have had thus far in 2011, combined with the bad decision last year to offer all employees an unsustainably cheap HRA insurance plan—our fund balance is in danger of losing $10 Million Dollars over the next calendar year—unless increases to premiums combined with plan changes are implemented by the district. This is what the school board has been told.
So, the benefits committee arrived at its recommendation to remedy this projected shortfall, to adjust premiums and make plan changes (AKA—putting the burden for the revenue shortfall back on employees’ shoulders) which the unions soundly and immediately rejected. However, the committee was not an autonomous committee—it had its hands tied with pre-ordained “parameters” which were given it by the superintendent, which called for no additional revenue to the plan from the district’s general fund. (To be fair, the committee did request $1.1 Million in additional revenue from the district’s general fund as a part of the overall recommendation it presented back to the superintendent.)
But the unions, meanwhile, are calling for the district to shoulder the burden of ALL of the cost increases, even though the union’s employees benefitted greatly by the inexpensive HRA premiums which helped to lead to this financial emergency with our benefits trust fund.
To settle this impasse, per the language in statute and also per our union contracts, the process is downright old fashioned.
First of all, the school board has been told that it cannot meet to discuss the issue now that we are at impasse. We cannot meet in executive session (which I understand) but I have also been informed by our attorney that we cannot even discuss the issue in the sunshine at an open, advertised meeting. ( I’m not sure I necessarily agree with that opinion, but I am going along with it for now..) Not only can we not discuss this issue at a meeting—we are also precluded from discussing any aspect of the insurance issue with either the union OR the Superintendent’s staff prior to a special meeting scheduled for next Monday, September 19th. And, to make matters even worse, we the board have been told that we must make a decision at the special meeting—no delays can be allowed because that will delay implementation and enrollment for the new plan year which begins January 1, 2012; Delays could further deflate the balance of the benefit trust fund. Oh, and we also cannot verbalize or in any other way express which way we as individual board members are leaning with respect to which recommendation (superintendent or union) we will accept or reject at this all important meeting on the 19th.
We have the World Wide Web, Video Teleconferencing, Consulting experts, all sorts of resources, yet we are expected to make a huge, multi-million dollar decision expeditiously and in isolation? We can’t meet to discuss, we can’t discuss with the parties, we cannot express an opinion, and we have to come to a decision on the same day of our special meeting? This process is fractured and not in anyone’s best interest.