ECSD Public HearingInsurance Issues

September 19, 2011

Escambia Education Association

Union of Escambia ESP

Why we are here:Projections show a funding deficit to the

trust. Plan had a bad year.Committee charged with finding a solution.District said NO MORE FUNDS AVAILABLE.

Consequently, the committee was forced to design a plan that places the increases squarely on the backs of the employees.

That Plan:Proposed placing 87% of the burden on

employees.4.66 million in increased premiums 7.66 million in plan changes.A total of a 12.32 million dollar hit

8% was placed on the District.1.1 million toward the reserves.

Retirees have a 5% increase.Employees rejected the proposal 94% to 6%.

What Imposing This Plan Will

Mean to Employees

HSA “Free” PlanEmployees must pay 100% of expenses

until $3,000 deductible is met.Then they pay 20% of all costs up to a

total of $6,000.There are no:

Physician visit co-paysUrgent Care co-paysEmergency room co-paysPrescription co-pays

HSA’s Possible Impact on Employees

Job Classification

Average salary*

Premiums(% of Salary)

Maximum Out of Pocket (% of Salary)

Salary left over before taxes

Food Service I $12,852 $3,840(29.9%)

$12,000 (93%)

-$2,988

Teacher Assistant

$14,713 $3,840(26.1%)

$12,000 (82%)

-$1,127

School Bus Operator

$19,420 $3,840(19.8%)

$12,000 (62%)

$3,580

Teacher $41,560 $3,840(9.2%)

$12,000 (29%)

$25,720*according to Florida Department of Education 2010-2011 year

Base HRA Plan’s Premiums Impact on Employees

*according to Florida Department of Education 2010-2011 year

Job Classification

Average Salary*

Premiums(% 0f Salary)

Salary left over before taxes

Food Service

$12,852 $5,040(39.2%)

$7,812

Teacher Assistants

$14,713 $5,040(34.3%)

$9,673

Bus Drivers $19,420 $5,040(26%)

$14,380

Teachers $41,560 $5,040(12.1%)

$36,520

Base HRA’s Impact on Employees

JobClassification

Average Salary*

Premiums (% of salary)

Deductible/Out of Pocket Max

Total PremiumsDeductible and OOP max

Salary left over before taxes

Food Service $12,852 $5040(39.2%)

$7500$15,000

$27,540 -$14,688

Teacher Assistants

$14,713 $5040(34.3%)

$7500$15,000

$27,540 -$11,027

Bus Drivers $19,420 $b5040(26%)

$7500$15,000

$27,540 -$6,320

Teachers $41,560 $5040(12.1%)

$7500$15,000

$27,540 $14,020

*according to Florida Department of Education 2010-2011 year

HRA 500 Impact on employees

Job Classification

Average Salary*

Premiums(% of Salary)

Left over before taxes

Deductible\Out of pocket Max

Total Salary left over before taxes

Food Service

$12,852

$6,600(51.4%)

$6,252 $4,900$12,000

$23,500

-$10,648

Teacher Assistants

$14,713

$6,600(44.9%)

$8,113 $4,900$12,000

$23,500

-$8,787

Bus Drivers $19,420

$6,600(34%)

$12,820

$4,900$12,000

$23,500

-$4,080

Teachers $41,560

$6,600(15.9%)

$34,960

$4,900$12,000

$23,500

$18,560

*according to Florida Department of Education 2010-2011 year

National AverageAccording to Consumer Expenditure Survey

conducted by the US Government – the average cost for a family of 2.5 people for health insurance is $2,374.90. This represents 4.8% of the annual expenditures*.

* See attached calculations

Possible Solutions

Increase District’s portion of the premiums.

Leave the Plan as is and redirect the $1,000 employer contribution to stabilize the fund.

Implement HSA as the free plan and place premiums on the HRA equivalent to 2009-2010 levels.

Problem With These Solutions

We have no way of knowing how much any changes made at this meeting will actually cost the plan.

We can’t fix this problem tonight.

Reasonable SolutionEEA Contract – Article I.1

C. Issues may be raised through the appropriate collaborative process for consideration during the life of this Agreement.

F. This Agreement shall constitute commitments between both parties and may be altered, changed, added to, deleted from, or modified only through the voluntary, mutual consent of the parties in a written and signed amendment to this Agreement.

Escambia ESP Contract – Article I.2Issues may be raised through the appropriate

process for consideration at any time during the life of the Agreement.

Therefore:Reconvene the committee.Direct the District to commit funds to

the plan in a effort to seek a more reasonable solution for your employees.

Using a 70%-30% split, the committee would have access to 10 million dollars if the District pledged 7 million dollars and the employees absorbed 3 million in premiums and plan changes.

Can the District Afford More?ECSD Supplemental Budget Information – September 15,

2011

General Fund Instructional Expenses – Over Budgeting

Instructional

Expenses

2009 2010 2011

Originally Budgeted

$193,956,679 $174,294,391 $186,358,674

Actually Spent $183,146,089 $163,889,346 $159,982,446Over-budgeted Amount

$10,810,590 $10,405,045 $26,376,228

Source: 2009, 2010, 2011 Comprehensive Annual Financial Report

General Fund Over-budgeting

General Fund

2009 2010 2011

Originally Budgeted

$313,896,266 $285,018,834 $303,648,139

Actually Spent $296,898,114 $271,694,756 $267,949,184Over-budgeted amount

$16,998,152 $13,324,078 $35,698,955

Source: 2009, 2010, 2011 Comprehensive Annual Financial Report

From the Superintendent’s Annual Financial Report

On June 30, 2011:“Unreserved Fund Balance was $56.5 Million or 21.1 % of the total general fund expenditure”

From the ECSD’s Board Policy

“It shall be the goal of the District to maintain a minimum unrestricted operating fund balance for non-recurring expenses of 3.5% of anticipated total revenue.”

It’s All About ChoicesIf we truly want to make ECSD a

place people want to work, then we need to make a better choice.

ECSD does not stand for EscambiaCountySecuritiesDeposit

Be INformed, Be INvolved, Be INvested