Spotsylvania school system wrestles with employee health insurance costs

Nov. 11--The budget for health insurance benefits for Spotsylvania County Schools employees has increased more than 47 percent since 2010 and rose to $40 million in 2016, leading the district to consider new options, administrators said at a work session this week.

Chief Financial Officer LaShahn Gaines said that compensation and benefits make up about 84 percent of this year's budget of more than $283 million. That makes health care about 17 percent of that employee pay cost.

"That is the reason why we're bringing this information to you today," Gaines said. "You can see every year has gone up."

Employee health care benefits have cut into or overcome cost of living pay increases for employees of school districts in Virginia, a trend not likely to change. At the same time, health care costs continue to rise on the district side as well.

"I'm very familiar with . . . what you go through on an annual basis regarding setting budgets and making sure that you offer these good benefits that your employees deserve," said Jeff Hartman, an account manager with Anthem Health Insurance.

Hartman, who also works with several other districts in Virginia, including neighboring Stafford County, explained options, including a health maintenance organization or HMO, a high deductible health plan or HDHP, and the current predominant option, a preferred provider option or PPO.

HMOs became unpopular for requiring people to visit their primary care physician in order to arrange specialist visits, among other reasons, Hartman said, but he added the plans have changed and become more accessible.

"It's a whole new game with HMOs now and they're much more popular than they used to be," said Anthem account representative Brenda Rippey.

High-deductible health care plans represent the fastest-growing trend, though, he said. These plans don't provide any insurance payment until after a significant deductible, usually at least several thousand dollars, but offer the option of a health savings account that employers usually contribute to and that employees can take with them into retirement--or into another job.

Board members said they thought that option might be popular with younger teachers who use their health insurance less on average, but were concerned about taking away options that have been popular with their employees.

"I understand you come from a 100 percent business standpoint," board member Amanda Blalock said. "I come from a...standpoint that it is a benefit for our employees, and I will argue and fight for their benefits."

She asked what Hartman would recommend.

"It is the toughest decision to make," Hartman said. "You feel bad for these employees when they have to choose a plan when they had such nice benefits as they did before. But there are things that are palatable, and you can offer them a choice."

He suggested making changes over time and offering a variety of options to employees to have a chance to adjust the schools' funding going forward.

Superintendent Scott Baker said that the district's compensation focus group, established a year ago, is seeking feedback from employees.

He wants them to feel like a part of the discussion, not simply to be told something's going to change, he said.

"I think hopefully it's coming through ... our employees need and deserve the best employee benefit plan we can provide them," Baker said. "We have to make decisions one way or the other, and it certainly is becoming more and more challenging to address both salary and benefits."

Katrina Dix: 540/374-5403

[email protected]

@philosophykat

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