Lynchburg City School Board rejects increase to employee health insurance premiums

Lynchburg City Schools employees won't see an increase to their health insurance premiums for the 2022 calendar year.

At its Tuesday night meeting, the Lynchburg City School Board rejected a proposal to increase employee health insurance premiums 7% for 2022 by a 6-3 vote.

The proposal would have yielded a monthly increase of between roughly $2 and $35 per employee, depending on which coverage plan they are enrolled in.

"It maybe seems small, but now is not the time," board vice chair Sharon Carter said. "I just don't feel this is the time."

Carter and board members Randy Trost, Robert Brennan, Kimberly Sinha, Atul Gupta and Gary Harvey voted against the increase.

"I think health insurance is a tremendous benefit for our staff, and I think that it's something I'm sure that they appreciate and we want to give it to them," Brennan said.

Board chair James Coleman and board members Susan Morrison and Michael Nilles voted in favor of the increase.

"We all want the very best for our employees," Coleman said. "We all want them to take home and utilize that for the betterment of themselves and their families, I think we're all clear on that. At the same time, we've got an operation, a division, that has to be sustainable."

Matt Smith, a representative with Corporate Benefits Consultants Inc., said Tuesday that LCS is self-insured with 1,358 employees currently enrolled in its health insurance plan.

With a total anticipated income of nearly $11.6 million - including about $8 million in employer contributions, more than $2.8 million in employee contributions and more than $750,000 in other funding - and an anticipated expense of just more than $12 million for 2021, Smith said the division should expect a deficit of around $407,000.

In the 2021-22 fiscal year budget, the board approved a 7% increase to the employer contribution for health insurance. The employee increase would have totaled roughly $200,000 for the 2022 calendar year and could have helped offset the anticipated deficit.

Smith anticipated a deficit of about $490,000 for 2022 if employee premiums remained at the current rate.

Smith said LCS employees are contributing less for their health insurance compared to other school employees across the state, according to data from 2019.

After consultation with Smith, LCS Chief Financial Officer Kim Lukanich recommended matching the 7% employer contribution increase with a 7% employee contribution increase, which the board ultimately rejected. Those who rejected the increase said the division would have to find some other way to offset the cost.

"It's something that we, as a board, can handle, we can address for our employees and I think we should," Harvey said.

During the past 10 years, LCS has raised employee premiums once, a 10% increase in 2018, Smith said.

Lukanich said open enrollment for the division's health insurance plan begins Oct. 25.

The next school board work session is scheduled for 5 p.m. Oct. 19. The next school board meeting is scheduled for 5 p.m. Nov. 3.