The Carroll County Board of Education unanimously approved a measure to add retirees to its dental and vision plans at no cost to the school system, while reducing costs for current employees.
The system’s plans to provide employee dental and vision coverage were due for renewal at Wednesday’s school board meeting and the system requested proposals that would include retirees.
“What we’re proposing in terms of retiree coverage, or inclusion opportunity, is that it be 100% funded by retirees,” Assistant Superintendent of Operations Jon O’Neal said.
The school board unanimously approved a $165,559 dental plan from incumbent carrier CIGNA and a $216,530 vision plan with a new carrier, National Vision Administrators, in a 3-0 vote. Board of Education President Marsha Herbert and member Patricia Dorsey recused themselves from the vote because of a possible conflict of interest. They are both school system retirees.
Most of the expense will be distributed among beneficiaries, though the school system is responsible for higher-than-budgeted medical claims. The system spent $5.6 million more than anticipated this year, and Superintendent Cynthia McCabe said in June she would consider ways to reduce the cost.
The National Vision Administrators’ network match is, “not as strong as the incumbent vendor, United Healthcare,” according to the meeting agenda, but, “the rates offered were 20.6% lower than the current rates for the employee paid plan. Rates were reduced by expanding the pool to
include retirees.”
The two-year vision plan will amount to a monthly premium of $3.64 for employees, down from $4.58. The five-year dental plan will cost employees $2.15 monthly, down from $2.35, O’Neal said on Wednesday. It is not yet clear how much retirees will have to pay.
Retirees who opt-in to the plans will pay higher premiums than employees, which should result in their inclusion coming at no cost to the school system, O’Neal said. However, retirees should be able receive dental and vision coverage at a better rate than they otherwise would be able to find.
“There is a slight risk with setting those premiums just right,” O’Neal said, “especially since we have no experience here. It’s probably going to take a couple of years to figure out exactly how many retirees would enroll in this program. You don’t want to set the rate so high that people don’t enroll. You don’t want to set the rate so low that there’s a terrible risk for the board.”
Board member Donna Sivigny said she is happy to support retiree benefits, as long as it comes at no cost to the school system.
“We definitely want to thank and support our retirees,” Sivigny said. “I think what we can’t do is put additional health benefit costs, but [we’re] happy to provide the availability [to] the retirees, that they can get these benefits at a much-discounted rate than they could go and get them on their own.”
Board of Education Vice President Tara Battaglia said it is important to support retirees because of how much they have sacrificed for the school system.
“These people have dedicated their lives, years and years of service, hours and hours,” Battaglia said. “They sacrifice a lot. They sacrifice their family time, they sacrifice time away from their kids. This is the least we can do.”
Board member Steven Whisler said he is concerned about the possible budgetary risk, though he ultimately voted in favor of the measure.
“The concern I have is that we’re bringing on 1,300 potential people,” Whisler said, “and the taxpayers are at risk for that.”
O’Neal said retiree inclusion could cost as much as several hundred thousand dollars, far below the $5.6 million recently incurred by employee coverage. That worst-case scenario would also represent an interim funding level, while the system adjusts the rate to a more appropriate level.
“We’re looking to find that sweet spot there, that makes it worth it to them to buy in, but also protects us,” McCabe said. “Even if we were off by some, it would only be for one year, and then we would keep looking at it, year after year. ”
The retired teachers association asked to be included in the plan, and Herbert said the school system could not function without the work done by returning retirees. Seven retirees were rehired by the school system, joining many others, in a personnel action item that was also unanimously approved by the school board on Wednesday.
