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Cash crunch strains schools' health planBy ROBERT KING © St. Petersburg Times, published February 15, 2001 BROOKSVILLE -- Superintendent John Sanders says the school district will have to trim employee health benefits for the third time in less than a year -- and do it soon -- unless there is a quick reduction in insurance payouts. About 1,850 school employees are insured by the district's self-operated health plan. It is fueled by a combination of tax money from the School Board's budget and employee contributions. The school district has about $1.7-million available to cover its health insurance costs through June 30. But at its current pace the district's health plan could run out of cash by April. That's a daunting prospect given that the two most expensive health insurance months last year were May and June, when employees piled up $3.4-million in medical bills. Teachers and school workers tend to postpone surgeries and doctor visits until the school year ends. Also, many medical providers bill services in June so they can settle their accounts before the end of the fiscal year. A repeat performance in 2001 could leave the School Board with a deficit of more than $3-million. Its current budget is $85-million. Sanders said Wednesday that higher health insurance premiums for employees could be enacted as soon as April if the costs don't come down. "We won't actually have any choice," he said. Still, Sanders and his finance director, Carol MacLeod, say that scenario is unlikely. They are banking on the hope that recent changes to the health plan -- which raised the out-of-pocket costs for people who use the medical services -- will stop the bleeding. A dramatic cost overrun would have to be carved out of the district's bottom line -- a collection of cash, unused supplies and investments now projected to be at $1.2-million. MacLeod says a dramatic health insurance deficit would have to be paid back over subsequent years. Sanders first raised the possibility of new health benefit cuts Tuesday after being questioned by School Board members about the district's budget. Teachers union president Jo Ann Hartge said she would not comment on the possibility of further benefit cuts until Sanders can explain them to her. Employees were hit with higher monthly premiums in the summer. On Feb. 1, more changes took effect, which meant more out-of-pocket costs for employees. The changes were prompted by the health plan racking up $1.8-million in debt last year. That debt was covered by a $1-million backup insurance policy and an $800,000 contribution from the School Board. Sanders and MacLeod say the district's current budget -- clouded by uncertainty in recent months -- looks sound except for the questions surrounding the health insurance. Since September, MacLeod's two immediate predecessors in the finance office put forth starkly different assessments of the district's financial health. But now Sanders feels good enough about his payroll that he lifted a partial hiring freeze that's been in place for weeks. Schools that have been filling teaching vacancies with substitutes can now hire full-time teachers, who earn more than subs. In the past month, Sanders has also relaxed a purchasing freeze. But he still intends to limit overtime pay except in cases in which there is an emergency maintenance issue. And summer school, an expense that comes at the end of the fiscal year, will not be offered to sixth- and seventh-graders -- a decision made in the last two weeks.
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From today's Hernando Times |
