District was able to save more than $800,000 by switching providers

By Jennifer Eisenbart

Staff writer

When the Burlington Area School District balanced its budget for the 2011-12 school year, it nearly had its plans upended by residents complaining about the 3.69 percent tax levy increase.

Now, some people are upset that the district appears to have found a way around requiring teachers to pay 12 percent of their health insurance premiums as outlined in the budget repair act put forth by Gov. Scott Walker.

The district found significantly cheaper health insurance for its employees for the school year and decided not to require teachers to make premium contributions this school year.

How did they do it? In using the cheaper insurance provider, the district was not required to force employees to pay 12 percent of their premiums as outlined by the new law impacting public employees.

District officials believed it was an ideal way to save money and not have to saddle their employees with new premium payments at the same time they were being asked to make new contributions to their retirement funds.

BASD Business Administrator Peter Smet said Tuesday that there is a loophole of sorts – the 12 percent is only required of public employees who use the state group health insurance plan offered through the Wisconsin Education Association Trust. Since BASD is using a different provider, the 12 percent premium contribution is not required.

“There is no regulation for public employees who are not on the state plan,” said Smet. “That’s a different insurance plan. The state plan is a specific state plan … administered by the Department of Employee Trust Funds.

“We’re not in that state health plan.”

State Rep. Samantha Kerkman confirmed that information Tuesday afternoon.

“They don’t have to (require the 12 percent payment),” Kerkman said. “(But) they can.”

However, that comes as news to several area residents – many of whom seem to still be stinging from the fact that they are already going to be paying more in taxes for public education.

In a letter to the editor this week, Sharon Asher urges the district to require the 12 percent anyhow, and for people in the area to contact legislators to close the so-called loophole.

“I do not think 12 percent is outrageous,” Asher said in her letter. “But zero percent surely is.”

Asher also outlined in her letter that the district saved $806,777 in medical insurance costs, and felt BASD could have – and should have – done more. She added that other school districts in the area did take that 12 percent requirements.

Asher didn’t know the school districts offhand.

According to numbers provided by the school district, the premium cost for a single employee’s health insurance is $6,312.72 per year – which, at 12 percent, would require that person to pay $63.13 a month.

For a family plan, the total premium cost would be $17,675.64, with a 12 percent payment of $176.76 per month.

However, the district knew during the budget process that it was not asking for premiums to be paid, and stated it.

The premium costs, according to Smet, dropped about $3,000-$4,000 per person, and the district saved close to $1 million in health care costs.

As a result, he defended the choice that was made to gradually requite the teachers to pay more toward their premiums rather that bearing the brunt of the full 12 percent at once. Teachers were already paying their Wisconsin Retirement System (WRS) contributions as the law outlined, so the decision was made to go with cheaper health insurance – and not ask for premium contributions, at least not yet.

“That was part of the discussion,” Smet said. “Since we had made such a significant adjustment … that would be the initial change.

“Other changes would have to be dealt with in future years.”