As Washington state lawmakers work to close a difficult budget hole that will undoubtedly lead to hundreds of educators losing their jobs, they ought to closely read a report from the state auditor’s office that could save the state significant money on health benefits for teachers.
The office hired a consulting firm to study the more than 1,000 pools of money that finance the more than 200 health benefit packages offered by the 295 school districts and nine educational service districts across the state. The report suggests that by consolidating those pools, paring the offerings and making other changes, the state could potentially save $180 million per biennium, or enough to cover 1,000 teacher pay-and-benefit packages.
It’s not news that the state has myriad plans. As a nod to local control, the state has given school districts the money and allowed them to devise their own plans as they bargain with teacher units. But with budgets so tight, the state should take back control and curb the administrative costs associated with managing so many different plans.
By putting teachers into a similar arrangement as other state employees, the state can also narrow the wide differences in benefits that teachers receive. The audit found that 52 percent of teachers cover just themselves and pay, on average, 5 percent of their out-of-pocket premium costs, or $27 a month. But average teachers on the family plan pay 39 percent of their premium costs, or $500 a month, which is higher than other state employees and many private-sector plans.
The audit notes that this disparity runs counter to the goal of pooling funds. In 1990, the Legislature clarified the intent, saying the system was created to “eliminate major differences in out-of-pocket premium expenses for employees who do and do not need coverage for dependents.”
The unions themselves have highlighted inequities with the system, but would probably not support changes that would lessen benefits. However, any changes will mean there are going to be winners and losers. The state does not have the money to increase its share, and any savings it can pick up through consolidation might be needed to help fill the chronic budget hole.
Of the 23 states studied by the consulting firm, 21 offer teachers health care benefits through statewide plans. The report notes that for technical reasons it would be difficult to put teachers on the same plans as other state employees, but the state could set up a parallel system with similar choices. As each unit’s collective bargaining agreement expires with a district, teachers would transition to statewide options.
The consolidation of health care packages has the potential for big savings and addresses the inequity issues. The state can’t afford to overlook this opportunity.