Teacher talks hinge on cost of health care - Daily Local News 3/6/2011

The Daily Local (dailylocal.com), Serving Chester County, PA

Teacher talks hinge on cost of health care
Sunday, March 6, 2011

By Evan Brandt
Special to the Local News

POTTSTOWN — With teacher contract talks stalling over the issue of health insurance, the Pottstown School Board was treated to an analysis Thursday night which concluded that compared to all health plans in the nation, the district currently pays more than the national average for the plan now covering teachers and the teachers pay less than the national average for their contributions.

But a member of the Federation of Pottstown Teachers' negotiating committee pointed out that the analysis paid scant attention to the current proposal the teachers union has made at the bargaining table and instead focused on a plan in place for five years which neither side has proposed keeping.

On Feb. 16, the Federation of Pottstown Teachers voted "overwhelmingly" to reject a fact-finders report that awarded them raises, but would have required that they join the health care plan now used by all other employees of the school district.

And in the Perkiomen Valley School District, a last-minute agreement that narrowly averted a teacher strike marked health insurance as one of the issues which had prevented an earlier settlement.

Thursday night's analysis was provided by Eric L. Dove, president of Elite Group Consulting, Inc. and is based on information from the Kaiser/HRET Survey of Employer-Sponsored-Health Benefits and the U.S. Bureau of Labor Statistics.

But teacher Lindi Vollmuth, who is on the negotiating team for the teachers, told the board the analysis "does a wonderful job and provides lots of information, but it also shows only what was put in place during the last contract" and does not provide a thorough analysis of what the union is currently proposing.

"Very little of what he presented here is anything we've put on the table," Vollmuth said after the meeting. The most useful analysis in terms of comparing costs, she noted, would be between what the union has proposed and what the district has proposed.

Despite the role health insurance has played in teacher contract negotiations, there is one thing about which there is little dispute — the cost of health insurance has skyrocketed nationally in the last 11 years, with the average premium rising 138 percent, Dove said.
(As a result, the use of national averages includes private as well as public employers, such as school districts.)

In 1999, the average premium nationally for a single-employee plan was $2,200 per year and $5,800 per year for a family plan.

In 2010, that same single-member plan cost an average $5,000 a year and $13,700 per year for the family plan, according to Dove's figures.

Worse yet — worker contribution to those premiums, which had largely charted a parallel course to the increase in overall premium cost, spiked sharply in the past year, meaning the average worker contribution over the same 11-year period has risen by 159 percent, said Dove.

Eleven years ago, the national average for a single-employee plan resulted in 14 percent being paid by the employee, and 27 percent by the employee for a family plan.

In 2010, that employee, on average, is paying 19 percent for the single plan and 30 percent of the premium for a family plan, Dove said.

The 138 percent increase in the cost of health insurance premiums far outpaces general inflation — which has risen 31 percent over the same period — and wages — which have risen 42 percent over the same period, Dove said.

And while these increases have been seen all across the country, the cost of health care premiums for the three plans currently enjoyed by the teachers union are higher than the national average, Dove said.

Although the national average for premium increases stands at 8.7 percent per year, the average increase in premium costs for the Pottstown School District in the last three years comes out to just under 20 percent more per year, according to Dove.

He also forecast an 11.7 percent increase in premium costs for the fiscal year that begins July 1, 2011.

It should be noted that although the overall cost of the plans differ, the teachers pay the difference in the district's costs.

Each teacher pays $25 per week for benefits, the same either for a single-person plan or a family plan, which covers what the district calls the "core plan." For more expensive plans, the teachers "pay up" to cover the difference between the "core plan" payment and the additional share of the more expensive plan.

Thus, the district pays the same for all three plans — $12,865 — because the teachers make larger contributions for the more expensive plans to ensure the district's out-of-pocket expense remains the same no matter which plan a teacher choses.

However, even the teachers share of the most expensive plan, called "Personal Choice 5" — which costs a teacher $3,328 a year out of his or her paycheck — is still below the national average of $3,823 for a PPO plan, according to Dove's figures.

If the district's plans matched that national average PPO, taxpayers would be on the hook for $10,210 per year, an annual savings of $2,655 per teacher.

All of which illustrates the obvious, Dove said, that "really great benefits do cost a heck of a lot of money."

So while the district's cost for the current teacher plans is higher than the national average, the contributions made by the teachers currently are lower than the national average, said Dove.

According to the analysis provided in the Feb. 7 fact-finder report, the federation has rejected the core plan adopted by the rest of the district and the proposal that the teachers adopt it and keep their $25 per week contribution the same.

Instead, the union has proposed making a more expensive plan the core plan but also raising its weekly contribution to $45, allowing teachers to both "step down" to the plan used by the rest of the district's employees and to also "step up" as they do now to one of the current plans still in place, also paying the difference between the core costs and increased premium, thus, once again keeping the district's costs the same.

Those contributions would increase in the second and third years of a proposed contract, but the fact finder, Timothy Brown, sided with the district and recommended the plan in place for the other employees be the core plan for the teachers as well.

According to a spreadsheet provided Friday by Business Manager Linda Adams, the core plan the union has proposed would cost taxpayers $468.48 more per year for each teacher with family coverage — and an additional $649.92 per year for each teacher with coverage for just one employee — over the option the district has proposed.

If put on the core plan the administrators and support staff have adopted, the annual taxpayer savings are $751.76 for teacher with family coverage when compared against the plans now in effect.

Under the plan the teachers have proposed, the annual taxpayer savings is $283.28 per teacher with family coverage.

Adams said the union has 247 members and estimated 234 of them use the health insurance offered by the district.

Vollmuth said her 25 years with the district has made it clear that with each new contract, the teachers union in Pottstown has accepted a health plan that requires more payment from the teachers.

"We contributed to the cost of our own health care long before other districts in the area," she said.

She also noted that during that period of time, "Pottstown teachers have never gone on strike."

Vollmuth also reiterated an invitation to school board members, first made by Beth Yoder, president of the Pottstown teachers union, to attend negotiation sessions.

Perhaps alluding to an analysis that she believes to have left out the most relevant information, Vollmuth said attending the sessions would enable board members "to get an accurate picture of what is going on there."

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