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Whitnall School District attempts to subdue healthcare costs

April 1, 2014

Greenfield — With health care costs resembling a monster that gobbles up precious tax dollars, the Whitnall School Board is trying to grab its arms and subdue it in a two-pronged attack.

First, the board decided to make sure everyone who is insured is actually eligible for district insurance by conducting an audit. That will be done in April and May.

Examples of the kinds of circumstances it will look for are children of people who live together or those raising their grandchildren. Wisconsin law doesn't recognize common law marriages, said Doug Johnson, business administrator, so their children would not be eligible for health insurance. Also, children raised by grandparents in the absence of a court order would also be ineligible.

"The good thing would be for us to find none of those," he said.

While the audit got the go-ahead, last week the board referred back to committee two options regarding covering spouses who have access to health insurance where they work.

The second prong of its attack involves either dropping them altogether or having spouses pay $125 a month to keep district health insurance.

The district's insurance consultant, Benefit Services Group Inc., estimates that dropping spouses would save roughly $424,000 annually. About 59 spouses would be dropped and 16 employees would probably move from family to single coverage, BSG estimates.

Having spouses pay the surcharge to stay in the plan might save between $157,000 and $190,000. Between 20 and 30 percent of employees would drop their spouses, and some of those also would drop coverage all together, BSG estimates.

"The carve-out is more effective," said Whitnall School Board member Stephanie Richter. But families have to have enough time to make the needed adjustments, she added.

Board member Nancy Zaborowski said the carve-out is in line with a trend to offer health coverage only to spouses who don't have coverage where they work.

But looming in the background is the monster's big right arm that could squash the district under thousands of dollars in a federal excise tax for having a so-called Cadillac health insurance plan.

"We're talking hundreds of thousands of dollars, and that will come right out of your budget," said board member T.J. Anderson.

The district plan's deductibles, copays and employee premiums are too low to satisfy the Affordable Health Care Act, known as Obamacare, Johnson said.

Although the numbers are changing all the time, Johnson said at one time, the acceptable deductible for a family plan was $6,250. The district's current family deductible is $3,000, he said.

The way Obamacare measures plans, Whitnall's had a score of 97 percent at this time last year. It went to higher deductibles, and that took it down to 94 percent, Johnson said.

But it needs to be below 90 percent to escape the excise tax, he added.

There will be much more debate about how that is going to be accomplished. The most obvious route is to raise deductibles and increase premiums, Johnson said.

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