published Thursday, August 14th, 2014

Hamilton County Schools struggle with healthcare costs

Could eat up 3 percent raise teachers got last year, board member worries

Hamilton County Schools headquarters
Hamilton County Schools headquarters
Photo by Staff File Photo /Chattanooga Times Free Press.

A proposal to charge teachers and school employees an extra $100 a month to keep their spouse and families on the school's health care plan got a cool reception Wednesday from the Hamilton County School Board.

"For those lower-income households where the spouse is not working, this is a real burden," District 2 board member Jonathan Welch said at Wednesday's work session.

So other options will be on the table when the school board decides soon how to cut the cost of a health care plan that doesn't quite reach the "Cadillac" category -- but is better than what's offered by other large employers, school officials say.

"Give us a few more options," school board Chairman Mike Evatt said, after discussion included a range of money-saving ideas, from getting more employees to use generic prescription drugs to charging employees higher deductibles.

The Hamilton County Department of Education spends $50 million annually on health care, said Ed Adams, the consultant who's helping the school district figure out how to cut costs.

The district could shave $4.5 million off that annual expense, Adams said, if it adopted the proposal to charge an extra $100 for family members along with other measures, such as increasing the co-pay to visit the emergency room to $250, up from $100 now.

"Insurance cost, it's eating up every bit of growth that we get," District 1 board member Rhonda Thurman said.

Yet she didn't embrace the proposed $100 increase on spouses and families.

"I think there's young married couples, young families, that it's going to hit hard," Thurman said.

"I know we got to do something," board Vice Chairman George Ricks said of health care costs.

But he worried the $100 monthly increase would wipe out the 3 percent raise that teachers got last year.

"This will take that," Ricks said.

Under the federal Affordable Care Act, informally known as Obamacare, employees with top-tier, "Cadillac" health care plans will be taxed on them, Adams said.

"Our employees don't want a Cadillac plan, because they'll end up paying taxes on their benefits," he said.

The IRS determines which health care plans have to pay the Cadillac tax, and the school district's is below the threshold, Adams said.

The board will discuss health care costs again at a 3 p.m. special session before its regular meeting Thursday and will vote on a cost-cutting plan at a special meeting on Aug. 28.

Contact staff writer Tim Omarzu at tomarzu@timesfreepress.com or twitter.com/TimOmarzu or 423-757-6651.

about Tim Omarzu...

Tim Omarzu covers education for the Times Free Press. Omarzu is a longtime journalist who has worked as a reporter and editor at daily and weekly newspapers in Michigan, Nevada and California.

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