Idaho gave schools millions to buy state health insurance, but many still can’t
Idaho Statesman (Boise)
Legislators this year passed a bill intended to allow school districts across Idaho to buy into the state’s health insurance plan and lower the cost school employees have to pay for insurance.
But as school districts across the Treasure Valley approve next year’s budgets, many in the Treasure Valley have found they didn’t have enough funds to buy into the state’s plan.
The Boise, West Ada, Kuna and Caldwell school districts all said they were short, with some needing millions more to be able to move its employees to the state plan. The Nampa School District is able to afford to buy into the state’s plan this year, but spokesperson Kathleen Tuck said that’s partly because the district already invested heavily in supplementing health insurance for its employees.
Even with a shortage of funds, many districts in the Treasure Valley said they will be able to significantly lower insurance costs for their employees, putting more money in educators’ pockets.
“We’re aware that there’s been challenges. …It’s unfortunate that we didn’t have that opportunity to fix this situation,” Idaho Education Association spokesperson Mike Journee told the Idaho Statesman. “We’ll be paying attention to it and talking with lawmakers about it this coming year.”
Lawmakers put millions toward health care funding
The past session, lawmakers passed a bill that created a fund for public schools to buy into the state’s medical and dental group insurance plan. About $75.5 million was appropriated for that fund — a one-time amount districts would need to buy into the plan.
Lawmakers also appropriated about $105 million as part of an ongoing funding appropriation to help boost funding for school employees’ health insurance costs from $8,400 to $12,500, in line with the amount currently funded for state employees. Districts have two years to buy into the plan.
At the time, lawmakers called it a historic opportunity that would help increase the amount of pay teachers and school employees took home.
Teachers and staff had previously testified that health insurance costs could take large chunks of their paychecks. Some educators in rural districts end up writing checks back to the district at the end of the month to pay for expensive health insurance policies, Idaho Education Association president Layne McInelly told legislators in February.
But the calculations used for the funding was based on the number of employees the state funds, not the number of employees in the district. Employees can be funded through local and federal funds, Boise School District spokesperson Dan Hollar said.
“Many school districts hire more personnel beyond what the state gets them funding for,” Journee told the Statesman. “And so as a result of that, the money that they allocated was based upon what the state provides as opposed to what districts actually have on their payrolls.”
The state uses a ratio for funding. For every teacher, it estimated it needs to fund .55 classified staff — employees who don’t require certifications, such as paraprofressionals and custodians — Rep. Rod Furniss, who sponsored the bill, told the Statesman. That is the ratio the state has used for funding since 1992, he said.
“That’s what we fund to each year statutorily, and so we had to stick to that number,” he told the Statesman. “We knew ahead of time that many school districts have more staff than we were allocating for, and have been allocating for over the years.”
That left many districts short the amount they would have needed.
But Furniss said it worked out well operationally to not have every school district coming onto the state plan at once. It’s “quite a process” when a school district changes from one insurance plan to another, he said.
“Operationally, we anticipated that not very many would come on the first year,” he said. “We want to work out all the bugs before all the schools come on.”
This year, some schools in the Treasure Valley have used COVID-19 relief funds or used funds from other areas to bridge the gap and buy into the state’s plan. Others have decided to wait.
Furniss said he anticipates about 2,500 employees will come onto the plan the first year.
Boise district adjusts employee contributions to plan
The Boise School District decided it wasn’t “feasible” at the time to move to the state’s insurance plan, Hollar said. The district would have needed to come up with an extra $15 million out of its general fund to afford the move.
Hollar said other reasons the district decided not to move included that it would no longer be in control of its medical, dental and vision plans and would not be able to use its insurance reserves for its wellness program. Hollar also said retirees would end up paying higher premiums under the state plan than they do under the district’s current plan.
But Hollar told the Statesman the district approved keeping medical insurance premiums the same for the next year and using additional state funding for insurance, which will reduce employees’ contribution to premiums for dependents.
The district will also be able to lower employee’s premium contribution rates by 30% to 40%, he said, depending on how many dependents employees have.
“This reduction in the employee’s premium contribution will result in considerable savings for our employees who have dependents on the plan and is a great step forward in ensuring that the Boise School District offers one of, if not the most, competitive benefit packages available to school district employees in Idaho,” he said.
West Ada short $7 million to buy into state plan
The West Ada School District is short about $7 million for the amount it would have needed to move its staff to the state plan, spokesperson Greg Wilson said. The district received about $12 million in additional ongoing funds, but would need around $19 million to make the move, he said.
Costs will still drop for employees. An employee with a child will pay about $93 per month, down from $180 previously, according to a memo from chief human resources officer Dave Roberts. The cost for employees with a spouse will go down by nearly half, from $759 to $393, the memo said.
The Kuna School District had about a $761,000 gap after the new funding was considered, spokesperson Allison Westfall told the Statesman. The total cost for the district to buy in would have been more than $2 million.
The district also said the state plan doesn’t meet the requirement that schools must offer retirees under 65 years old coverage that is the same as active employees.
The Caldwell School District also did not have enough funds to buy into the state’s plan this year. The district was short about $600,000 for the one-time buy-in to the state’s plan, spokesperson Jessica Watts told the Statesman. It would cost the district an extra $1.2 million per year to enroll employees in the plan, she said.
Journee said many school districts may also be waiting to see what happens with those that do jump onto the state insurance plan to get a better idea of whether it makes sense for them. Other districts that already had more robust insurance plans may use that money somewhere else or bring down premiums.
“It’s a mixed bag of missed opportunity, honestly, that the Legislature didn’t fund it completely,” he said. “All that said, it still does put money in many educators’ pockets in districts that are able to take advantage of it and use it to help provide insurance, whether they come on the state plan or not.”
‘A once-in-a-lifetime kind of opportunity’
The Nampa School District was in a “unique situation” because it had already been supplementing its employees’ health insurance plans, Tuck said. The district was able to add to the money that it got from the state to come up with enough to buy into the state’s plan.
The move cost the district about $925,000 on top of what it received from the state.
“There was a pretty big buy-in, and that’s why a lot of districts have not been able to move over to this plan,” she said. “We decided that we would go ahead and take some money that we had and do this, because we feel like it’s a once-in-a-lifetime kind of opportunity to add a really good benefit for our employees.”
It will impact employees differently depending on whether they are also insuring a spouse and children.
In the past, the district had two plans available with two different deductibles, $1,000 and $2,000 a year. For the plan with the $1,000 deductible, employees would pay about $701 per month to ensure themselves and their spouse and about $287 per month to ensure children.
The state offers three plans, including a traditional plan with a deductible of $450. Under that plan, an employee would pay about $255 to insure themselves and a spouse, and about $229 to insure children, Tuck said in an email.
Tuck said had the district not already been subsidizing its employee’s health insurance, it would have been “very difficult” to find the money needed to buy into the plan. She said because districts aren’t well funded, they do whatever they can to try to “be creative” and get the best package possible for employees. That can include higher salaries, or better benefits.
“You just do what you can to try to attract people to your district,” she said. “This is a bigger reach for a lot of districts. … We felt very fortunate they were able to look at our numbers and find a way to make it work.”
Can more districts move to Idaho plan next year?
The legislation gave school districts two years to buy into the state’s plan, and Furniss said he expects many more districts to be able to buy into it next year.
“We hope they will,” he said.
There are some larger schools that he said may never come on because they already have plans that rival the state plan.
Next year, the Legislature could increase the funding to make it more feasible for districts to buy into the state plan.
Furniss said the plan is well-run, has low expenses, and will standardize premiums and coverage across the board. He hopes lowering health insurance costs for teachers, especially in rural areas, will allow teachers to work where they live, and will help districts be more competitive in attracting and retaining teachers.
“We were having a hard time retaining and recruiting teachers. And it costs money … to train new teachers,” he said. “It’s so important that we have a quality benefit program so that we don’t have to spend so much money training new teachers. If we can retain them, we can almost pay for this program.”