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Norwin gets more than $500,000 in health plan reimbursement

| Wednesday, April 9, 2014, 9:00 p.m.

The Norwin School District will likely use a $535,000 reimbursement to help pay for major purchases, build its reserves and make pension contributions, according to school officials.

The district is getting the reimbursement from the Westmoreland County Public Schools Healthcare Consortium because insurance costs during the past several years have been lower than estimated, said John Wilson, Norwin's director of business affairs.

“We (the consortium) ended up having an excess, so we decided to refund it back to the district so they can use it rather than having the consortium just build up a sizable fund balance,” Wilson said.

The 20-member consortium consists of 16 school districts, the Westmoreland County Intermediate Unit and two vocational schools. Norwin pays about $4.5 million a year in health-insurance premiums for about 470 employees, Wilson said.

Matthew Hutcheson, superintendent of Jeannette City Schools and the consortium's chairman, said the combined insurance costs for consortium members have been running lower than projections by the insurer, Highmark.

Consortium members will meet later this month to finalize the increase in premiums for 2014-15, Hutcheson said. The estimate of 5.1 percent is half of the original 10-percent projection, he said.

Wilson said he is still trying to determine how to recommend using the money.

“I'm not 100-percent sure what my recommendation to the school board will be for how we divide the money we receive, but there are some areas I'd like to see addressed,” he said.

Wilson said he would like to see a portion of the money placed in the school district's capital projects fund, which is used for building repairs or to make major purchases of things such as vehicles and technology.

The business manager also will recommend that some of the money be placed in the general fund “to provide a reserve in case our costs are higher than our revenue.”

A third area being considered for the reimbursement is a reserve fund designated to cover impending increases in retirement contributions. The fund currently has about $680,000.

During the past several years, school districts have had to contribute more money to the Public School Employees' Retirement System, or PSERS, which pays for pensions and health insurance for school retirees. The system is underfunded by about $33 billion, according to PSERS officials.

Contributions have gone from 8.65 percent of a district's payroll for 2011-12 to the 21.4 percent for the 2014-15 school year.

Staff Writer Chris Foreman contributed to this report.

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