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Health insurance changes will save Youngstown schools $4 million annually
By Denise Dick
YOUNGSTOWN
The city school district will save about $2 million annually through a change in the teachers union health insurance in addition to the $2 million annual savings reaped from the same change made by classified employees.
Treasurer James Reinhard said that by the two employee unions changing to a consortium, the district will save about $4 million annually – $2 million per union.
The Youngstown Education Association, the teachers union, approved the change last week. The school board still must ratify the agreement.
“In my opinion, the credit goes to the union and the school board,” said Stephen Stohla, interim superintendent.
The school board authorized him to negotiate with the teachers, he said.
“Despite the fact that our employees are among the lowest paid in the county, the board appreciates their willingness to agree to these changes,” Stohla said in a news release.
The savings the first year is expected to be about $1.8 million because of incentives.
The teachers will join the Stark County Schools Council of Governments, the same consortium that the classified employees union joined last May for health coverage. That move saved the district about $1.6 million.
Under the consortium, employees pay higher deductibles.
Larry Ellis, YEA president, said about 350 of the union’s 400 members attended the meeting and the vote was “almost unanimous.”
The district approached the union about making a change after the classified employees joined the consortium.
It will cost the teachers more, Ellis said, but it’s an effort to help the district stay out of financial difficulty.
In exchange, the contract, which had been set to expire in June 2016, is extended to June 2018, Ellis said. The pact already called for a 2 percent pay increase this year. The extension provides 2 percent increases next year and the following year.
For years, the district’s health insurance has been self-funded, meaning money is set aside to fund health-insurance claims. Those claims increased 37.5 percent in 2014.
District officials have said the health insurance is expensive for the district, providing lower deductibles and lower out-of-pocket maximum costs for employees.
“It’s significant,” he said. “That’s probably the biggest part of our budget that wasn’t going to kids. It was going to the medical community essentially. Now those monies will be going to kids instead of doctors and hospitals.”
Since the school district is in the education business, its money should be going to children, the treasurer said.
Reinhard said that while the change is a concession on the teachers union’s part, it isn’t expected to cost members significantly more.
“Our problem is we’re too small to be self-insured,” he said. “That’s really the essence of the problem – it’s not feasible because we’re too small.”
The Stark County consortium, though, includes 56 school districts in 19 counties.
“It’s a much larger group, so it has more financial ability to predict risk better,” Reinhard said.
By joining the consortium, the district becomes eligible to participate in its group purchasing programs. Those programs include paper products, cleaning supplies, gasoline and other items.
“The school district is committed to finding ways to continue to operate in a manner that delivers the maximum services to our children with the available resources,” Stohla said. “The administration appreciates the spirit of cooperation exhibited by the YEA in response to the board’s initiative to reduce costs throughout the district.”
The next regular school board meeting is next Tuesday.