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Another health option put forth in Hempfield

| Wednesday, Feb. 17, 2010

Hempfield Area school board and representatives of the teachers union met privately Monday to try to reach an agreement to change health care as directors hope to save $100,000 a month in premiums.

The board met with Joseph Scheuremann, president of the Hempfield Area Teachers Association, and other officers in an effort to reach a compromise that would allow the district to shift to a self-insured health care plan.

Any change by the district must be approved in writing by the union before it can occur, according to the terms of the contract.

Scheuremann said the board proposed a plan utilized by the Blackhawk School District in Beaver County that is self-funded.

"We told them -- you get it, we'll listen to it," he said.

President John Henry said Scheuremann told the board the union was not comfortable with a self-insured plan.

"He said they didn't want to go with self funding," Henry said. "They said they have concerns but didn't explain what those concerns were.

"We've got to look at options," Henry said.

It will cost taxpayers in the Hempfield Area School District $3.2 million next fiscal year to pay for teachers salaries, health care and pension contributions.

The school board tried to force a change in health care last summer without the union's approval. The union went to court and obtained an injunction blocking the switch.

Henry said he doubts the board would try that again, given the legal costs and the bad public relations that likely would occur.

Blackhawk participates in the Blackhawk Insurance Partnership of Rural School Districts, which comprises four districts in Beaver County.

School districts across the nation have joined consortiums in an effort to save money.

According to a 2009 study by the New York State School Boards Association, there are advantages and disadvantages to joining a consortium.

Among the advantages is the ability to design a program to meet members' needs. Districts can use their purchasing power to negotiate lower premiums than those with community-based plans.

Consortiums, because of the large number of members, can spread the risk, compared to plans utilized by individual districts. Consortium membership is considered a long-term, cost-containment strategy, the study said.

But the consortium could suffer financial losses if claims in a certain year exceed the amount of premiums a plan has collected, according to the study. Most states require self-insured plans to maintain a large cash reserve of at least 25 percent of expected claims to pay unexpected losses.

Consortiums also buy stop-gap insurance, which caps the amount of claims a plan would have to pay.

The teachers countered the board's offer by recommending the district consider joining the Allegheny County Schools Health Insurance Consortium, which represents 47 schools and more than 20,000 teachers in Allegheny County.

In a memo last month to the rank-and-file, Scheuremann said the board is getting erroneous information from the district's advisers. "There is absolutely no doubt that, financially, the (Allegheny consortium) is a much better option than self-insurance," Scheuremann wrote.

While the board negotiates with teachers, the district continues negotiations with bus drivers and cafeteria workers over a new contract which, if unsuccessful, could lead the district to hire private companies to bus students and run the cafeterias.

Henry sees a link between the two issues.

He said the union has asked for fact-finding. Henry said if the two sides could reach an agreement on health care, that would give them room to work on outsourcing.

"I would like to have the health care issue resolved so we can save money and not outsource," Henry added. "We could work on the two other issues and be done with all this."

David Broderic, spokesman for PSEA in New Stanton, said he could not comment on the fact-finding issue.

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