School district seeks to shift insurance burden [The Bakersfield Californian]

Nov. 23--A local school district, in what's being called a rare move, is seeking to cut costs by limiting the medical benefits of employees who are eligible for coverage through their spouse's employer.

And it's getting pushback from one of the area's largest employers -- the county of Kern -- because of the financial liability it would create there, officials said.

Under the Panama-Buena Vista Union School District's plan, employees eligible for medical coverage through their spouse's employer would not be eligible for school medical coverage.

Instead, the district would reimburse an employee for out-of-pocket costs not covered by the spouse's insurance. And the district would give an employee an incentive for sending his or her spouse to the spouse's employer plan, if eligible.

The idea has been approved for some workers and proposed for others.

In a strong rebuke, the Kern County Board of Supervisors recently approved a change to county benefit policies stating that Panama employees would not be eligible for county medical plans if they were denied coverage by the school district.

"It puts all of the risk for the health claims in the lap of another employer," said Susan Wells, employee relations officer in the Kern County Administrative Office. "The action we've taken puts the risk back to where it belongs."

Wells said county officials are aware of one other school district in California that has made such a proposal. Other local school agencies are closely watching how the situation plays out.

Local school employers would not be affected by the Panama plan, but scores of other local employers would.

"This is very unusual," Wells said. "We took a defensive position. Our intent is not to deny coverage to dependents. We will pay in the right position. We have to protect the plan of our employees."

Panama officials would not comment on the details of the plan, not wanting to bargain with unions in public.

It was unclear what rights other employers would have to block this idea. Wells said she has heard of other employers expressing concerns about the Panama plan.

The plan has been approved by Panama classified employees -- clerks, custodians and classroom aides, for example -- as part of a contract, and has been ratified by the school board. The Panama-Buena Vista Teachers Association must still ratify it; a vote on the contract is scheduled for Tuesday.

The plan, if also passed by the teachers union, would save the district $1.6 million this year and much more in future years, said Michael Brouse, Panama's assistant superintendent of business services.

Panama has been one of the hardest-hit school districts in Kern County financially in recent years. Earlier this year it made a state list of financially troubled districts that would have to make drastic cuts in coming years to stay fiscally afloat.

Reductions in state funding combined with declining student enrollment have, in particular, left the district in bad shape.

If a mid-year state budget cut is imposed as expected, for example, the district would be deficit spending by $10 million this year, Brouse said. Future years are looking more bleak.

"The reality is we felt we have cut everything we could think of to cut as far away from students as possible," Brouse said. "At this point there isn't much left."

The only options left are cutting salaries and benefits, either by paying employees less money, implementing layoffs or, as in this case, shaving benefits.

Darla Bramlette, president of the Panama teachers union, said the group will have a meeting for members to voice any concerns about their contract.

"As far as I know, we don't have an issue (with the plan)," she said.

The so-called Medical Expense Reimbursement Plan is scheduled to be in place Jan. 1. By modifying its policies, Kern County would force Panama-Buena Vista Union to offer those employees their district medical plan.

Also, the district will become self-insured within the Self-Insured Schools of California program, joining the likes of other large school employers like the Kern High and Bakersfield City school districts. That would mean Panama would pay claims out of its own pool, and bypass SISC premiums.

Panama's MERP and self-insured plans are designed to save the district money, said Nick Kouklis, CEO of SISC, an insurance provider that represents hundreds of local schools.

Officials at SISC -- which is not endorsing or promoting the MERP plan to its school district clients -- are watching how the situation plays out, Kouklis said.

"We're going to wait and see how this goes with Panama," he said.

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