Germantown considers long-term insurance options for teachers

Germantown - After deciding, this summer to remain with the Wisconsin Education Association Trust for health insurance, the Germantown School District is again at odds with the trust over benefits.

The board was not of like minds when the group decided to renew its contract with WEA for health insurance coverage, saving the district more than $1 million. There is once again internal indecision about whether or not to continue offering long-term care to current and retired employees.

In December, the board voted to end long-term care for employees, but after consulting with legal council, realized further action would be needed. According to WEA spokesman Steve Lyons, Germantown is under a group policy. If they end long-term care for current employees, retired employees would lose coverage as well because they're all part of one group.

According to the school district's legal team, losing coverage for retirees would be a violation of the contracts under which those employees retired. In other words, the district would have to find and provide the option for long-term care to retired employees.

Interim School Board member Cari Brust characterized this as holding the district hostage, using a gun to the head metaphor, but Lyons insists WEA has been transparent about what dropping coverage would mean.

"If the Germantown School Board makes the decision to no longer offer long-term care to their current employees, then the retirees are part of their group benefit," Lyons said. "You can't pick and choose who can be in and who can be out.

"This isn't something we'd be doing to them, it's a decision the School Board is doing on behalf of all of their members."

Costs becoming a burden

Germantown decided to end the long-term care package through WEA due, in part, to the cost. The district pays about $250,000 per year in costs, although they don't directly pay for retired employees. Those employees are given the option to remain under the structure of the agreed upon plan when they retire, but pay out of pocket for it.

District officials have said finding a new carrier seems like the best option, which is why the district voted to rescind their letter to WEA informing the trust they would be dropping long-term care coverage.

A new letter will be sent with a March 1 drop date in order to give the district time to determine if a new carrier can be found at a lower cost.

School Board member Tom Bowe offered reticence over trying to hold the line on this particular issue.

"Is this the right time, the right moment to take a stand on this?" he said to the board.

Seeking options

The board did request that administration send out bids to different insurers to see if a lower cost plan can be put in place. According to Lyons, affected retirees - 103, according to the district - have several options.

One option is to change to an individual plan based on a similar structure to the current long-term plan, only it would be through a WEA affiliate and not the trust directly. Another option is to get what's called a conversion plan, giving the retiree the same benefits as the group plan, but at an individualized cost based on age.

The third option is an accelerated option where a retiree could pay the lump sum of the old group plan's cost to receive benefits for the life of the policy.

There are more than 120 current teachers and staff who would be affected by dropping long-term care through WEA. Superintendent Sue Borden said increasing costs in health care are a reality both the district and employees have to deal with.

"It is not a shock to anyone that contributions will continue to increase."