Families cost schools $880K in insurance
Published 1:05 am, Thursday, May 6, 2010
Health-care costs are set to jump up again for Darien Public Schools in the upcoming fiscal year, with the cost of medical insurance increasing by $1.8 million, or 24.8 percent.
There are several factors contributing to this increase.
"One thing I might mention on health insurance for 2009-2010; we assume because of the economy, we've had a migration of spouses onto our plan," Board of Education Chairman Kimberly Westcott told members of the Board of Finance during a joint meeting in March. "We've had 65 additions to our plan, which increased both our cost and can affect the experience."
According to the district's Director of Finance Richard Huot, the addition of 65 new people the district's insurance plan has cost about $880,000 since October 2008, when the trend first began.
While about half a dozen of these new additions may be attributed to new staff, the remainder represent dependants tacking onto district employees' policies, Huot said.
"A lot of children have lost jobs and come back onto their parents' coverage," he said. "And spouses have lost jobs and come back on to their spouse's coverage."
A new Connecticut law, Public Act No. 08-417, which came into effect on Jan. 1, 2009, allows unmarried dependents up to age 26 to receive coverage under their parent's plan. The coverage legally extends until the person marries, turns 26 years old, ceases to become a resident of Connecticut or becomes covered under a group health plan through his or her own employer.
"If you were working at a job that didn't have health coverage, or you were not working, you could go on your parents', so that could have been perhaps a reason for the addition of people enrolling," said Sal Dipillo, a spokesman from the Connecticut Department of Labor. Additionally, the idea that someone may lose a job and enroll on a spouse's plan "makes really good sense," he said.
As of March 2010, there were 40,594 unemployed workers in the Bridgeport-Stamford labor market, according to documents from the Connecticut Department of Labor. The unemployment rate in that area for March was 8.5 percent.
But while unemployment of spouses and children may be at the root of some of the additional people receiving coverage by the school district, officials cannot be sure.
"People don't have to tell us that spouse is coming on because they've lost a job or lost coverage," said Superintendent Donald Fiftal. "It could be they're coming on because someone got married. We're not entitled to all kinds of information about why people are coming on."
According to district documents presented to the Board of Finance on April 5, 711.33 full-time employees received health insurance through the district in the 2009-2010 fiscal year, at an estimated cost of $10,159 per employee. In the upcoming fiscal year, it is projects that 708.03 full-time employees will receive coverage at a cost of $12,734 per employee. This increase represents a $2,575 -- or 25.34 percent -- hike in cost per person.
Part of that cost can be attributed to the addition of 65 people, while part simply aligns with the increased cost of health care packages offered by insurance companies, Fiftal said.
The district is switching providers for the upcoming fiscal year, moving over from Anthem to a company called CIGNA.
"Every year the insurance company re-rates," Fiftal said. "It happens that the insurance are just coming off of with Anthem, they promised us no rate increase for 18 months. And of course to go 18 months without any rate adjustment, that's another reason for he increase."
And the new rates will affect the district's employees as well as the town's taxpayers.
"When the Board of Education cost goes up 25 percent, the insured individuals, like me for example, pay 25 percent more, too," Fiftal said.
Outpatient co-pays for employees will increase $50 from $100 to $150, and the teacher premium share is increasing from 17 percent to 18 percent; other than that, the changes for teachers is minimal, according to district documents.
Another theory as to why people have come on to the district's plan is the reputation of the insurance carrier.
Huot said that some of the add-ons could be due to the fact that the district used an insurance carrier called Anthem for 18 months, which "may have triggered a few spouses to come over."
"I think there's a mental aptitude that Anthem provides better service than anybody else," he said.
The coverage with CIGNA will be "essentially identical," Huot said.
Fiftal said Darien's costs are "favorable" in comparison to peer districts. Darien has the lowest cost per full-time employee when stacked up against New Canaan, Ridgefield, Weston, Westport and Wilton, according to district documents. New Canaan has the second lowest cost per employee at $12,621 per person, and Ridgefield has the highest at $18,608.