Anderson says SAD 1 to see 13-percent increase
in medical insurance premiums
By Scott Mitchell Johnson
Staff Writer
PRESQUE ISLE — School districts throughout the state continue to face financial hurdles, and the latest involves an increase in medical insurance premiums.
At the April 10 SAD 1 board meeting, Charles Anderson, business manager, said the district will need to absorb a 13-percent increase starting July 1.
“As part of our employee agreements, we provide a certain level of insurance coverage for teachers, administrators, bus drivers, custodians, ed techs, secretaries and cafeteria workers,” said Anderson. “While there’s slightly varying amount of dollars involved from the district’s perspective in each of the agreements, most of the costs involved are driven by the premium costs.”
Anderson explained that last year the Legislature passed a law that forced Anthem of Maine to release individual loss information on all the school units in Maine.
“The upside of that — from a competitive perspective — is that other potential insurers might be able to have the information for the first time and make bids hopefully in an open market concept,” he said. “The downside is that there no longer is a statewide pool of all of the medical insurance costs and a single medical insurance rate for all school units.
“Once Anthem was forced to release the individual loss information, they decided to rate school units on an individual basis,” said Anderson, “so if you have a ‘good loss experience’ instead of a ‘bad loss experience,’ you get a lower rate as opposed to one pool where everybody gets the same increase year to year.”
SAD 1 is in the “worse-than-average experience” category.
“The plans that we offer — Choice and Standard — are subject to a 13-percent rate increase,” said Anderson. “Statewide, over half of the school units are going to be subject to this 13-percent rate increase. There’s only a handful that are down in the 0-percent increase range.
“In each employment agreement we have, we guarantee at least full single coverage, which means — at the very least — we’re going to be absorbing a 13-percent increase for all of those employees who have single coverage,” he said. “It will be something less than 13-percent for every other category — two adults, family or adult with children.”
Anderson called 13 percent a “huge increase.”
“The last several years the average rate increase has been between 4-5 percent,” he said, “so to jump to 13 percent is significant. We’re going to be paying premiums of about $4.5 million of which employees contribute a part, but it’s a big chunk of money and that pot of money is going to get bigger and we have to address it.
“We don’t really have any good options other than continuing with Anthem and paying what represents an approximately $300,000 increase to us. This increase is on top of a $260,000 shift from the state to the local taxpayers in what has been traditionally the state’s share of employee retirement costs. That’s going to be in the budget proposal that we’ll present April 24,” said Anderson. “Going forward, it’s possible that somebody will come along and look at it as a competitive situation and maybe we can go with some other provider.”
A loss of approximately $675,000 in state aid, a negotiated wage and benefit adjustment for all employees, and staff and other cost reductions are included in the proposed budget.
A budget workshop will be held at 5:30 p.m. Wednesday, April 24 in the board conference room at Presque Isle High School. If needed, a second budget workshop will precede the May 1 meeting at 5:30 p.m. Approval of the budget and warrant articles will be decided at the meeting, while at 7 p.m. the district will hold a public hearing on a bond referendum concerning energy conservation and school renovation projects.
A regular SAD 1 meeting will be held at 6 p.m. May 15 with the district budget meeting to follow, while voters will decide on the budget validation referendum, budget validation continuation referendum and the bond referendum June 11.
Also during the April 10 meeting, directors were notified that Jennifer Espling, who currently teaches first grade at Pine Street Elementary School, will teach fourth grade at Zippel Elementary School next year.
In addition, the board accepted the retirements of Emily Knight and Marianne Dyer, special education teachers at PIHS.
