Education associations offer compromise; district should get out of insurance business

  • By David Brighton & Patty Sirois
  • Thursday, February 18, 2016 10:52am
  • News
Education associations offer compromise; district should get out of insurance business

The Kenai Peninsula Borough School District and the two education associations have been bargaining for over a year. The associations have made numerous attempts to compromise and meet the district’s demands and we look forward to the district meeting us in the middle, where we have already moved in good faith. 

More than a year is long enough for the associations to wait for a contract that is worthy of the awards and accolades that our educators earn. The teachers and support staff of the KPBSD are the leading examples for the rest of Alaska to follow and they have earned the respect and value to match their credentials.

In February 2015, the district’s initial health insurance offer had the district paying $1,804 per month per employee. Almost a year later, on Jan. 13, 2016, the district proposed limiting its payment for health insurance to $1,500.  This is concerning because the latest proposal could be considered regressive in nature as the district did not offer anything to offset the reduction in benefits from its first offer.

Seeking a new road to compromise, the associations’ current proposal includes a provision for the district to get out of the health insurance business.  We have proposed joining the Public Education Health Trust. The PEHT, a nonprofit organization, was established to provide health care coverage for educational employees and includes the Anchorage, Mat-Su and Juneau school district employees and covers more than 16,000 lives. We believe it’s time for the district to stop managing health insurance as a part time job and focus all of our efforts on educating our kids.  

With the PEHT, the associations have proposed that the district pay $1,580 per employee, far below the $1,804 per month that the district initially proposed. As a matter of fact, the associations’ proposals will save the district’s portion of the health care costs well over $3.2 million in FY17. This savings is due in large part because the district will no longer have to pay for insurance for hundreds of employees who choose to opt out of health insurance coverage.  

In order to maximize the number of people opting out of the district’s health care, the associations proposed that the district pay an incentive of $400 per month to have eligible employees opt out of the insurance plan. This $400 incentive saves the district $1,180 per month for each employee who opts out. According to a report by the district’s insurance broker there are around 216 employees who could opt out. That is a substantial savings to the district. If the district remained as a self-funded plan, according to the district, opting out is not a viable financial option.

In addition to face value savings, the Trust is a better deal for KPBSD than continuing to be self-insured. First, the Trust sets rates early in the year.This allows for more accurate budgeting by the district. Second, the Trust has a larger number of covered lives. This helps eliminate spikes in the plan cost when some employees have accidents or develop serious medical conditions like cancer or heart attacks. Simply put, joining the Trust offers predictable prices, there is less risk and it saves the district money. 

When looking for ways that the district can save money, one has to wonder about the $100,000 budgeted for legal fees. From July-November the district has already spent more than three-fourths of that amount and bargaining isn’t finished.  In the past, a central office administration, as part of their contracted responsibilities, negotiated with the associations. Instead of taking care of business in house, the district’s monthly legal fees are more than a year’s wages for some employees. 

At the Feb. 1 school board meeting, a board member made a comment that it didn’t appear that the associations and the school board were looking at the same set of facts and wished the parties could sit down and work things out. The associations couldn’t agree more. We invite community members and board members to sit and meet with us to go over the numbers about healthcare savings and salaries. 

In closing, the associations have made compromises and have given in to the district’s demands throughout the process — not least is agreeing that the district only provide health insurance for new employees that work 30 hours or more per week.  Further, the district has budgeted for a 3 percent increase in salaries and the employees are asking for only 1.5 percent.  

Many members of the associations have students in the district. We are dedicated to ensuring that the district has a successful future. However, we believe that the KPBSD cannot continue to successfully lead Alaska if we fail to attract the best teachers and support staff. We are looking forward to negotiating with the district on Feb. 22 and we expect to have a productive session. Please call your school board members and ask them to direct their bargaining team to accept the associations’ proposals. 

David Brighton is president of the Kenai Peninsula Education Association. Patty Sirois is president of the Kenai Peninsula Education Support Association.

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