Board increases health insurance allocation

The board wants district employees to pick up some of the insurance costs.
By HAROLD GWIN
Vindicator education writer
YOUNGSTOWN -- An insurance consultant has recommended that the Youngstown Board of Education set aside an additional $2.6 million a year to pay for its employee health insurance.
That's a 20 percent cost increase over last fiscal year, which ended June 30, said Carolyn Funk, district treasurer.
The district sets aside money each year to provide medical, dental, prescription and vision insurance and had a balance of $4 million in its insurance account at the end of fiscal 2004, which ended June 30, 2004, prompting the board not to increase the funding level for fiscal 2005, she said.
The board opted instead to set aside $13.8 million, the same allocation made the previous year.
However, Funk told the board Tuesday that claims paid out by the district in fiscal 2005, which ended June 30, totaled $15.5 million, well above the district's contribution and higher than the average annual cost.
The district's insurance consultant, Grossman & amp; Associates of Cleveland, recommended that Youngstown increase its annual allocation by $2.6 million to be sure there are sufficient funds to cover claims.
The school board voted Tuesday to begin setting aside higher monthly allocations beginning in January to meet that target.
It's a substantial increase but it won't drive the district's budget into the red, Funk said.
She has warned the board in recent months that fiscal 2006 will be a very tight year for the budget. She's stopped short of predicting a deficit but has warned in a five-year projection that a deficit is very possible in fiscal 2007.
Discussion of the increased insurance costs prompted Jacqueline Taylor, board president, to again raise the issue of having employees contribute to their health insurance costs, something the board has been hinting at for months.
Only the superintendent contributes to her health care insurance, picking up 5 percent of that cost as one of the terms of her contract.
Funk told the board she and others met earlier in the day with representatives of every district employee group, both union and nonunion, to begin discussions about employee contributions to health care costs.
She said she is hoping to get employees to pick up $1.2 million, about 10 percent, of the average annual insurance cost. Annual claims average between $12 million and $14 million, she said.
Employee representatives indicated they want a close review of the insurance program costs, including a claims audit, before they consider making direct contributions to health care costs, she said.
The employees also suggested that changing the current plan to increase employee co-payments for various insured services, which should reduce overall costs to the district, might be another option to consider before looking at premium sharing, she said.
gwin@vindy.com