Health insurance update: Local control leads to solutions

When Idaho’s Legislature and Gov. Brad Little teamed up to  provide $105 million in additional funding to supplement Idaho school districts’ health insurance costs, many hailed it as a “game changer” that would allow districts to join the state insurance plan with its relatively low premiums.

But as of this month, only 20% of Idaho’s school districts have joined the state plan. Why is that?

Recently, we visited with six district leaders to find out why. We met with administrators from two small rural districts (Cambridge and Midvale), one medium-sized district (Weiser), and the three largest districts in Idaho (Boise, Nampa, and West Ada).

Of the six, only Nampa will join the state plan. Nampa will use federal ARPA funds to manage the $600,000 shortfall it will face to fund the program. Nampa officials indicated that the biggest selling points for the district will be more predictability and stability in coverage for staff and improved benefits. Like most districts, Nampa has faced increasing annual costs for insurance and volatile insurance rates.

For the other five districts, the ongoing costs of joining the state plan were just too high. The primary reason? The state calculated the monetary distribution for insurance (an additional $4,000 plus per employee) based on the number of employees funded by the state and the amount allocated for each position.

But most districts hire more classified employees (bus drivers, special education aides, custodians, food service workers, etc.), than are funded by the state, as well as federally funded positions (i.e. special education teachers and certified and classified staff who work with migrant and English language learners). Additionally, several employees (business managers, technology specialists, human resource officers, etc.) employed by districts are necessarily paid at a higher rate than the $26,000 the state allocates per these classified positions, which leads to a reduction in the number of positions the state actually funds.

As a result, most Idaho districts chose to use the new funds to improve the health insurance plans they currently offer their employees rather than join the state insurance plan, which would have required the districts to reach deep into their discretionary funds now and in the future.  Fortunately, state officials provided flexibility for these new funds so districts could come up with local solutions and improved health insurance plans.

The West Ada District, Idaho’s largest, was able to significantly reduce employees’ family insurance premiums, saving employees with family coverage as much as $6,156 a year. Weiser increased the district contribution to employee insurance by almost 50%, and reduced the family insurance deductible by half. Similarly, Cambridge and Midvale enhanced existing plan components for their employees, and Boise was able to reduce family premiums by as much as 40%.

The governor’s commitment to local control, favored by a large majority of Idaho voters, was well-served by the passage of the insurance bills by the Legislature. Local solutions were implemented to address local issues, which look very different in Cambridge than they do in Boise.

The process of implementing the legislation highlighted issues with classified personnel staffing and wages. Every school district in the state hires more (sometimes double) the staff allocated by the state, and pays far more for some positions than the allocation provides. Additionally, every district official indicated that they’ve had to raise hourly wages to compete for these employees. These issues need to be addressed in future legislative sessions.

Educators are thankful for the commitment of the governor and Legislature in reducing insurance costs and improving employees’ deductible and co-pay costs, along with other health care expenses. We understand that this is a substantial ongoing commitment to employees and their families.

Our hope going forward is that with an incoming record budget surplus, additional steps will be taken to build upon and solidify the initial investment in assistance with vital insurance.

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