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New teacher health plan helps keep contract’s costs down

01/11/11 by admin | No Comments

Posted in: Health

New teacher health plan helps keep contract’s costs down

Balancing limited pay increases with a health plan retooled to hold down insurance costs, teachers and the school board have agreed to a new three-year contract.

Salary increases in the agreement will cost taxpayers 1% more next year, then 2.5% and 3% in the second and third years.

“The teachers understood where we were economically, and understood raises had to be moderate,” Negotiating Committee Chairman Richard Steinhart told fellow school board members.

“They’re still getting increases, where many people in town aren’t,” negotiating committee member John Palermo said of teachers. “And it’s the same benefits package — but at a much cheaper cost.”

The contract was unanimously approved by the Board of Education on Oct. 13, and had been previously ratified by the teachers’ union — reportedly with just one dissenting vote among more than 200 cast by members of the National Education Association-Ridgefield (NEA-R).

The health plan changes are designed to “migrate” most teachers into a “high-deductible health savings account plan” similar to the one school administrators agreed to last year. The teachers current “point of service” plan would be retained but higher deductible and co-pays. There are incentives designed to get teachers to switch to the less costly plan.

Geri Carley, president of roughly 420-member union local, said: “In this current economic climate, the teachers were pleased to reach a three-year agreement with the Board of Education, one that allows for modest salary increases, while realizing that we have a responsibility to the community of Ridgefield, to either participate in the lower cost HSA insurance model or shoulder a higher premium share with the current health insurance plan. In the end, what’s most important is the fact that the high quality of programs and instruction in the Ridgefield school system will be maintained.”

The three-year agreement runs from July 1, 2010, to June 30 2013.

“Thank you, thank you, thank you,” Board of Finance Chairman Marty Heiser said to the school board after its vote Tuesday night.

He praised the agreement as one that would help the town hold down recent escalation of salary and benefits costs.

“I really appreciate what you did, and what the teachers did,” Mr. Heiser told the board.

The change to a health savings account plan is a move the board tried to get teachers to switch to during last year’s frenzied budget reduction work on the heels of world financial crisis.

Mr. Steinhart said that, among teachers unions, “This is the kind of contract that’s never been done in the State of Connecticut before,.”

The contract starts with a current teacher salary account of about million a year.

A 1% general wage increase accompanied by “no step movement” for the first year, 2010-11, would add 5,000 to town costs.

No general wage increase is given in the contract’s second year, 2011-12, but teachers would get the traditional step movement up the salary scale and people on the top steps would get raises of 1.55%. The town’s second year cost increase is just under 1,000, 2.5% in the salary account.

A general wage increase of 0.59% would occur in the third year, with step movement and a 2.01% increase for top steps. Those changes would increase the salary account by 3% or ,074,000 for 2012-13.

Altogether, the contract spreads .3 million in raises over the three years.

Teachers’ current contract gave raises in the 3% range but the cost to the town runs about 5% a year when “step increases” — movement by individual teachers up the salary scale — are factored in.

A starting teacher with just a bachelor’s degree an no teaching experience makes ,710 a year today. Through the three years of the new contract that to would rise to ,167, ,897 and ,172.

At the top of the pay scale, a teacher with a PhD and 20 or more years of experience makes 2,108 this year. Under the new contract that will increase to 3,129, 4,727 and 6,832 over the three years.

After the Oct. 13 board meeting Mr. Steinhart and Mr. Palermo said that as more and more teachers switch to the high deductible health savings accounts or “HSA plan,” the contract would save the town significant amounts each year without really reducing teachers’ benefits.

“This is a dramatic savings for the town,” Mr. Steinhart said.

“It’s never been done. We encouraged the teachers to move to the HSA plan. I’ve always said we have a moral and ethical obligation to provide high quality health care to the staff, and the HSA plan provided those plans at a great reduced cost to the taxpayers of Ridgefield.”

In the health savings account plan agreed to, employees share 17% of the premium cost, which increases to 18% in the contract’s final year. The board will contribute 60% to the deductible amount (,000/,000) in the first year, and 50% in the second and third years.

“You look at the average out-of-pocket cost, it will be less for most teachers — not everybody,” Mr. Steinhart said.

Superintendent Deborah Low said, “These changes will significantly moderate health insurance cost increases that the board would otherwise experience over the life of this contract …Teacher negotiations are never easy,” she added. “However, the agreement above represents a dramatic departure from past negotiations, and reflects the team’s commitment to achieving a settlement that reflects the current economic climate. I recommend this settlement without reservation.”

“Quite frankly,” Mr. Steinhart told the board, “we hope to do this for all the other unions, as well.”