Posted on 11/19/2012 5:36:19 AM PST by MichCapCon
The Forest Hills Public Schools paid its employees $1.7 million in 2010-2011 to opt out of its health insurance package in a lucrative setup that one small business lobbyist said was unrealistic.
At that time, the district offered to pay about $5,000 — the cost of that employee being on the district’s single-subscriber insurance plan — to not take the health care plan in which the district paid 100 percent of the employees' health care premiums.
"So if I don't buy the insurance, you are giving me money I didn't have to pay because the school district paid it?" said Charles Owens, Michigan director of the National Federation of Independent Business. "That's not a business model. That's a government model."
The Grand Rapids school district also pays 100 percent of the premiums for dental, vision, long-term disability and life insurance for those who opt out.
Overall, there were 351 school districts that spent $39 million in 2010-2011 on "cash-in-lieu" payments where the school offers the employee money to opt out of its health insurance plan, according to state records.
The Forest Hills school district changed its plan in the next teacher's contract so that the offer was lowered to 75 percent of a single-person plan in 2011-12, and 80 percent in 2012-13. The teachers also paid 10 percent of their health care premiums in 2011-12 and 11 percent in 2012-13.
Forest Hills Superintendent Dan Behm said cash-in-lieu payments dropped to $885,634 in 20012-12 while total employee benefit costs were $11.6 million.
"Paying insurance-eligible employees a stipend when they elect not to accept health insurance is a long-standing practice on the part of many employers," Behm said. "The idea is to save dollars by having fewer eligible employees on insurance rolls. Why incur the costs of health premiums if the employee is covered by a spouse or does not need the insurance?"
Behm said the language in the contract had been in "for some time" and predated his tenure as superintendent.
Michael Van Beek, education policy director of the Mackinac Center for Public Policy, questioned why Forest Hills even had to have a deal that was so lucrative.
"There are other school districts that pay no cash-in-lieu benefits or that pay substantially less," Van Beek said. "Why is it Forest Hills thinks it needs to spend $5,000 per employee for this perk?"
facepalm.jpg
Bush's fault!
I seem to recall my company offering $1200 to any employee who opted for their spouse’s insurance plan. Of course, one spouse would have to pay extra for coverage because the other didn’t use their company insurance.
That deal ended 8 or 9 years ago.
It would be a good idea if the schools paid the rest of the claims that the insurance companies don’t pay, but since that is not the case, this seems pretty stupid to me.
All together kids, sing it!..........”look for the union label....”
My husband's insurance will cover him at one premium level and then another premium level for "dependents". Whether he covers only me or only our child (or 5 children, if we had them) or both, is the same price.
It wouldn't make financial sense for me to drop out of his insurance and start paying my own, if he is still covering the kid.
We had basically the same deal when I worked for a non-profit (this was in the 80’s). If the family was covered by one spouse’s insurance, it was actually less confusing to only have one health insurance plan. I doubt we were paid the entire premium saved but it was not unusual.
If the state is still paying 100% how have they opted out? It sounds like they are using standard insurance policy to make sure there are fewer eligible policyholders. Usually when you are hired, there is a probation period and after you are eligible for group insurance only for a limited time. If you don’t sign up good luck and more so if you have a preexisting condition.
There was a time both spouses could be insured. Whichever spouse became ill his/her insurance would pay most of it while the spouse insurance would pay the rest.
I don’t know what it’s like now; but insurance companies never made their money through insuring people; but through investments. Sometimes it was real estate; sometimes stocks whichever was the most lucrative at the time.
During the month that you could make changes to your health care coverage (aka “Open Enrollment”), Verizon would give you a list of insurers, their costs, and a dollar amount. If you used all the money in choices from the insurance list, but no more, then your paycheck was not affected. If you selected more than the amount offered, the difference came out of your pay (divided evenly across the year’s 26 pay periods). If you selected less, then the money was added to your paycheck (again divided evenly across the year’s 26 pay periods).
If you opted for someone else’s insurance (or no insurance), the company still owed you for the benefit they offered at the time of your hiring.
My plan has the same (employee, employee+spouse, employee+children, employee+family).
But what I was talking about is the company paying an employee to use the their spouse’s company-sponsored plan, not open a private insurance plan for themselves.
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