Osceola County School District grapples with $2.4M health care debt

By Rachel Christian Staff Writer The Osceola County School District’s Health Insurance Trust Fund is rapidly spiraling into debt. The fund, which pays for employee healthcare with monthly insurance premiums, racked up $2.4 million in outstanding expenses in the first quarter of 2018. In just three months, healthcare expenses exceeded revenue by twice as much

By Rachel Christian

Staff Writer

The Osceola County School District’s Health Insurance Trust Fund is rapidly spiraling into debt.

The fund, which pays for employee healthcare with monthly insurance premiums, racked up $2.4 million in outstanding expenses in the first quarter of 2018.

In just three months, healthcare expenses exceeded revenue by twice as much as the same time last year.

It’s a trend that Superintendent of Osceola County Schools, Debra Pace, described as “unsustainable.” Several board members described the debt as “a crisis situation.”

Pace went before the School Board last week to share the latest numbers.

“We’ve got to continue to discuss what other things we can and need to do,” Pace said.

Expensive treatments for employee illnesses, such as diabetes and muscular-skeletal diseases, as well as the pricey specialty drugs associated with them, are contributing factors to the district’s mounting debt.

“But in general,” Pace noted, “it has been from higher claims from dependents and spouses.”

District officials knew numbers didn’t bode well last year when they attempted to increase employee health insurance premiums for the more than 6,600 teachers and support staff who get coverage through the district.

Time ran out during union negotiations last year, and now even greater increases are back on the table once again.

The district released its Salary and Benefits Negotiation Proposal for 2018-19 in March. The proposed contract has been unpopular with teachers and staff, who argued that minute salary increases were negated by substantial monthly premium hikes.

The proposal includes a $2,560 increase per year for district employees with a spouse on their plan, and $4,440 more for the family plan.

Those enrolled in basic employee-only coverage will still have a $0 monthly premium – at the price of a higher deductible – while those on the popular Wellness Local Plus plan would begin paying $41.60 a month, or $500 a year.

Employee-child yearly premiums are poised to increase by $1,800. Employer contributions from the district are set to decrease by nearly 25 percent for the same plan.

Chief Financial Officer Sarah Graber said in March that the School Board is trying to move away from insuring employee spouses, who drive up overall costs without contributing to the district.

This is why, she said, spouse and family plans are facing the biggest increases.

Board members at the May 1 meeting lamented the district’s health trust fund predicament.

“Do we have any leverage at all?” Board Member Kelvin Soto asked Pace. “Or do we just have to accept that every year drugs are more expensive, procedures are more expensive, and that’s just something we can’t do nothing about, and we are slaves to these market-driven prices?”

Pace said the district is working with Cigna, its healthcare provider, Gallagher, a consulting firm, and Florida Hospital to find solutions to rising costs.

School Board President Ricky Booth asked Pace if Gallagher has examined similar school districts in Florida to see how they are grappling with national healthcare increases.

Pace said she would discuss this with the consulting firm and update the board with new information.

Meanwhile, negotiations between the district and the teachers’ union have intensified.

Unable to reach agreeable terms during bargaining meetings last month, the two groups declared impasse.

Declaring impasse starts a process involving mediation, and a special trial where both sides submit what they want and evidence to support why they should get it.

That special trial takes place at 9 a.m. May 31 and is open to the public. The location has yet to be determined.

 

Until then, Apryle Jackson, president of Osceola County Education Association, the union representing teachers and support staff, said the group plans to protest along U.S. Highway 192 May 19.

 

Jackson said teachers are organizing other events this month to protest the proposed health insurance hikes and minimal raise increases.