School Board gets report on how it could change insurance for employees

At the Aug. 13 regular meeting of the Van Buren Public Schools Board of Education, Human Resources Director Abdul Madyun gave a lengthy report on changes that could be made to the health insurance for district employees that could benefit both the district bottom line and the employees.
He said the committee isn’t ready to come to the board with a recommendation since it is still studying the situation. Madyun said all the contracts in the district have the health care coverage negotiated in and there are several different carriers involved.
The best deal for the district and the employees seems to be changing from the 80/20 procedure to the hard cap for health care. And, being self insured could be a plus, he said.
Currently the district pays 80% of the health care premiums and the employees pay 20%. When the district changed to this procedure in the past it was a trend. Now, however, those still with 80/20 are in the minority, he said.
The hard cap is when the state sets an amount, now at $17,892.36, and the district can’t exceed that. It goes up 3% a year.
Madyun said in 1999, it cost the district from $7,000 to $8,000 for health insurance for a full-time employee. In 2017, it cost $20,000.
He said the district’s insurance carrier for teachers was paid $3 million in premiums in the 2017-18 school year and had just $2 million in claims. He said the carrier rewarded the district with $149,401, 5% of the carrier’s profit, which Madyun noted wasn’t very much.
He said this study of the district’s insurance started when he formed an insurance committee to try to be competitive with other districts for insurance as well as salary. He said the committee has representatives of all union and non-union groups in the district.
They studied how the insurance business works and the employees voiced their various concerns, which was helpful, he said. He said the insurance committee does not make any decisions, but has discussed matters with each bargaining committee.
He said the current reality is that the total yearly premium for an employee is $19,398.31, and the district pays $15,518.65 and the employee pays $3,879.66.
Madyun pointed out that is higher than with the hard cap. He said having one different plan for each of the unions doesn’t work.
He said with one version of the hard cap and self insurance, the employee would have no premium to pay.
With self insurance, an employee would be paid directly for medical and prescription claims, rather than through an insurance company.
“Self insurance is not gambling,” Madyun stressed, explaining the district would purchase gap insurance to protect against a catastrophic situation. And, the district would hire professionals to pay claims so there would be no change to the business office operations.
He said they have estimated the district could conservatively save $500,000 to $600,000 with that model, even with paying for the gap insurance and hiring a company to run it.
“We will continue to do our due diligence to determine if this is beneficial,” Madyun said.
He said they are talking to other districts that are self insured to find out how it is working for them. He said Lincoln Park was self insured for 40 years and then came out of it because they didn’t have the proper gap insurance and had a problem. After several years, they went back to self insured. Northville and Lake Orion also are self insured.
Since several unions are involved in the committee, Madyun said those unions are encouraged to solicit information from their union peers in other districts.
School Supt. Pete Kudlak said with self insurance there is customer service you can get ahold of.
Madyun said instead of negotiating with carriers, the district would regulate what its plans look like.
Board member Susan Featheringill was asked if she ever worked for a district that was self insured and she said she has and, “You have to be careful what you do.”
“Twenty-six percent is a lot of money,” said board secretary Kevin English, referring to the amount paid for health insurance by one of the unions.
Featheringill asked when the board will discuss a change to hardcap and Supt. Kudlak said if they changed to hardcap now, one of the unions would have to pay 60%. He said the self insurance would have to be set up first before they can switch to hardcap.
With each union having a different insurance carrier, it would have to be worked out in negotiations first.
In other business at the 41-minute meeting on Aug. 13, the school board:
• Approved a one-year agreement with the Van Buren Association of Educational Secretaries that includes longevity bonuses, three Act of God days, proper training for administering daily medications to students, having Owen secretaries report for a 216-day year and comparing them to the duties and determine appropriate calendar for Owen, day after Thanksgiving as a holiday, add Food Service Secretary into the VBAES unit, scrutiny of overtime, salary schedule adjusted as bargained, overtime pay if secretary has to remain in the building after school with a remaining student, and keeping all the terms and agreements of the present contract;
• Approved a property tax collection agreement with Van Buren Township, which has collected summer taxes for the district since 2002 at no cost to the district. Director of Finance Shareen Barker said VBT Deputy Treasurer Sean Bellingham told her the township is completing an application and needs to have a collection agreement with the school district on file. Neither the township nor the school district can locate such an agreement. Barker said VBT collects $7,150,000 in property taxes for the district. As part of the agreement, the township shall add an interest charge to each unpaid bill, as established by state statute and a delinquent tax roll will be prepared for the county;
• Approved 305 students in grades 9-12 for BHS Band Camp at Camp Tamarack Aug. 20-24. The list of adult chaperones with background checks was included in the request;
• Approved the termination of employment for teachers Dana Nanni after less than one year of service at Owen Intermediate School, for a job opportunity, as of July 26; Lakisha Washington-Booker, after four years of service at McBride Middle School, as of Aug. 5, no reason given; and Jessica Roberts, after 2.5 years of service at McBride Middle School as of Aug. 8, for a job opportunity;
• Approved the hiring, as of Aug. 28, of Sara Sych to teach functional art at Belleville High School; Vincenza Zaia to teach Spanish at BHS; and Alojzija Horvat-Bokor as an Autism Spectrum Disorder teacher at Savage Elementary;
• Approved the retirement of Jeffery Stillwagon after 25 years of service as a school bus driver as of July 23, with board secretary Kevin English praising his work;
• Heard a mother of a five year old remind them she had been before the board on June 25 with the request for her daughter to go to Edgemont Elementary instead of Tyler Elementary near her Kirkridge home. She explained that her daughter has been going to Bethany latchkey and was expecting to walk over to Edgemont with the other children for first grade and then return to Bethany latchkey. The mother said her daughter is already reading and has had a positive experience at Bethany. She was told at Edgemont that she couldn’t send her daughter there. She said she didn’t realize that the district didn’t have intradistrict school of choice, only if you come from the outside. She said she was told she would be called and nobody called her. Supt. Kudlak apologized, but Board President Keith Johnston said he had told Kudlak he would call and he did and left a message. She did not return his call, he said, and she apologized for not getting it. Supt. Kudlak said they did talk about it and will call her again;
• Heard Curriculum Director Jeff Moore announce a 16-page district newsletter will be going out quarterly, starting next week. He said the driving force behind the newsletter has been Jane Stalmack; and
• Went into closed door session for Attorney-Client Privilege and did not make a decision after the session ended except to adjourn.
Absent from the meeting on Monday were Trustees Darlene Loyer Gerick and Simone Pinter.