Insurance Impasse

Front Page / May. 18, 2017 9:21am EDT

Ed. Health Care Delays Session’s End
By Sandy Vondrasek

A few weeks ago, the Vermont legislature appear headed to an easy and early adjournment for the year.

A budget had been approved by both the Senate and House, and Gov, Phil Scott had indicated his support for the spending plan.

Not long afterward, however, Scott announced he would veto the budget if it did not contain a mechanism for the state to capture savings from a major transition underway in school districts across the state, as they shift to new health insurance plans for their teachers.

The change, part of the federal Affordable Care Act, requires teachers to move to a lower-value healthcare plan by January 2018 or pay a penalty. Virtually every district in the state is now renegotiating its teachers’ contract and only a handful have been settled so far.

Scott claimed that his plan would save up to $13 million in FY18, and up to $26 million annually thereafter. He initially pushed for health care plans for teachers to be negotiated on a state-wide basis, instead of district-by-district, as they are now, but has since eased up on that demand. Although both the House and the Senate have since developed counter proposals, as of early this week there was no sign of a plan that all sides could agree on, and nobody was predicting when the legislature might adjourn.

The Herald has talked to individuals in the White River Valley who are keenly interested in this struggle, including legislators and school administrators, as well as a board member and a teacher involved in local negotiations.

No Time To Vet’

Rep. Sandy Haas of Rochester quickly ticked off her objections to Scott’s proposal.

First, she said, is that the governor’s estimated $26 million in annual savings is “a back-of-a napkin number; I’ve seen nothing to back it up.”

Scott’s plan, Haas added, “is based on a whole bunch of assumptions,” including that teachers will be paying a higher percentage of premiums than they do now.

Haas’ chief objection, however, is the governor’s timing: “In the House,” she said, “we have an Education Committee, a Labor Rela- tions Committee for issues related to collective bargaining, and a Ways and Means Committee that looks at tax implications of a bill.

“This came forth after the committees had done all their work— we’re on the floor, out of committee. We haven’t had the chance to do what the House does with this kind of proposal, which is to analyze it in the committees of jurisdiction.”

Who Gets the $$?

Although a number of Democrats have characterized Scott’s plan as an assault on teachers’ collective bargaining rights, that is not the top concern for Orange County Sen. Mark MacDonald.

MacDonald, one of the architects of Act 60, has been keeping a watchful eye on the state Education Fund since it was created 20 years ago. There have been several attempts over that time, some successful, to either shortchange the fund or to pillage it for uses other than support of public school education, he said.

MacDonald sees Scott’s plan as another attempt to redirect education funds—or in this case, potential school budget savings—away from school districts and their taxpayers, so they may be used to fund other state programs.

“If the health plans produce as much savings as advertised,” he said, “it would be a terrific opportunity for local school boards to lower tax rates in local school districts.

“The question” MacDonald added, “is who gets the savings—the local school or does the state take those savings and use those savings to fund other things in state government?”

Board Negotiator

However, at least one board member in the area, South Royalton’s Geo Honigford, favors the governor’s plan. Honigford, who has been a member of the Royalton School Board for 11 years, is also the chair of the Vermont School Boards Association (VSBA).

“The timing by the governor may be unfortunate, but it doesn’t mean … it is a bad idea,” he said.

The plan promoted by Scott late in the session is a lot like the “cost containment” proposal that the VSBA pitched to the governor and to House and Senate leaders early in the session, he said.

Honigford explained that because of provisions in the ACA, school districts must move to plans with higher deductibles and more outof pocket expenses for teachers. As a way to counteract that effect, negotiating teams statewide are looking at establishing health savings accounts (HSAs) or health reimbursement accounts (HRAs) to cover larger out-of-pocket expenditures.

Honigford said he favors the idea of conducting negotiations on health care plans at the state level. Even after serving 11 years on his board’s negotiating team, he admitted, “I still do not have a great grasp on all the nuances of health care.”

Honigford believes that there are enough savings in the new health care plans to produce a “win-win” for all parties. However, using some or all of the projected savings to fund other state programs is “something different than what the VSBA talked about,” he conceded.

Teacher’s View

Nora Skolnik, a teacher at Randolph Elementary School who has been involved in negotiations for years, said the new insurance plans are not the problem.

“I think teachers for the most part would be fine with the new plans, if—and there is a big if—the school districts gave HRAs, so that the high deductibles and co-pays would be covered.

“This is totally separate from what the governor is trying to do,” she continued. “Teachers are very upset about it.”

The concern, she said, is that a move to state-wide negotiations would be a first step in the loss of bargaining rights. Skolnik pointed to legislation in Wisconsin that ended a union’s right to negotiate for its members.

Gov. Scott’s plan, Skolnick said, “is a last-minute ploy to hold the budget ransom.”

There had been support for the budget “across party lines,” she said. “To throw this in last minute, I feel, is really dirty politics.”

Teachers in Orange Southwest have been bargaining with board reps since November, according to Skolnik. The current contract expires June 30.

Superintendent Views

“My views on these issues have a more practical perspective,” commented Orange Southwest Supt. Brent Kay.

Kay estimated that conducting separate negotiations in every district “costs the state tens of millions of dollars.

“I have long been a proponent of statewide teachers’ contracts— it worked in Canada,” said Kay, a Canadian who has been the OSSU superintendent for 15 years.

Kay acknowledged that there are pros and cons, but added that one big advantage is leveling the playin field in terms of attracting strong candidates. One statewide contract, he pointed out, would allow a relatively poor, rural district to offer the same benefits as a wealthier one.

White River Valley Supt. Bruce Labs said he supports Scott’s proposal.

And, Labs added, with everyone in the state renegotiating contracts, “this is a beautiful time to do it.”

Taking health insurance “off the table” for local school boards and having the state do it, he said, “makes our life so much easier.”

When asked whether he shared Sen. MacDonald’s concern that any savings might be funneled to other state programs, Labs said, “I like the fact that the money is going to higher education and preschool, and I don’t like that it is coming from us.”

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