When the new school year begins in two weeks, most of the 75 non-certified personnel in the Oneida Special School District will have their weekly work load reduced to 29 hours as the school system’s answer to new federal health care requirements that will take effect Jan. 1, 2014.
The employees, who range from cafeteria workers to janitors to teacher assistants, were informed of the school system’s decision to cut their hours in a letter two weeks ago.
The issue, according to director of schools Ann Sexton, is pending requirements of the federal Affordable Health Care Act, which will require each employer with 50 or more employees to offer those employees affordable health insurance coverage as of Jan. 1 — a requirement that would cost the school system hundreds of thousands of dollars that Sexton says it does not have.
[s2If !current_user_can(access_s2member_level1)]To continue reading, please subscribe to the Independent Herald. If you are already a subscriber, email firstname.lastname@example.org to receive login credentials. If you are a subscriber who is logged in and believe you are seeing this message in error, please email email@example.com or call 423-569-6343.[/s2If]
[s2If current_user_can(access_s2member_level1)]“This was not an easy decision to make,” Sexton said. “It was a hard decision. But we’re not alone. This is something that is happening more and more across the nation as we get closer to Jan. 1.”
The school system was able to exploit a loophole of sorts — employees who work fewer than 30 hours do not fall under the requirements of the federal health care law. By dropping those employees to 29 hours per week, the school system will not be required to offer them health insurance coverage.
However, OSSD central office staffer Connie Thomas pointed out that the employees are not being considered part-time workers. Instead, she said, they’re simply being reclassified so that they can keep their current benefits, including retirement and dental insurance, with one exception being reduced annual sick leave from 12 days to five. Part-time employees, which the school system also has, cannot be offered those benefits.
Non-certified personnel will also keep their current salary, despite the reduced hours, according to Sexton.
“Employees will still be paid like they’re working 40 hours,” she said. “Their check will not go down. They won’t lose other benefits. They’ll still have retirement and everything else.”
However, 20 of the school system’s non-certified personnel who currently take insurance through the system will lose that coverage effective Dec. 31.
The new health care law requires that employees be able to obtain health care coverage with premiums that do not exceed 9.5 percent of their gross wages. If an employee earns $10,000 per year, he cannot be made to pay more than $950 for insurance. That simply would not work for OSSD, Thomas said.
“Right now we’re basically paying a 75-25 split,” she said. “Our 75-25 split is not $950. Our plans are $15,000, and 75 percent of that is $12,000.”
OSSD administrators estimated that providing plans to all of the system’s non-certified personnel would cost $300,000 annually. Sexton said that was not feasible.
“If we come up at the end of the year and we need $300,000 to pay for this, we can’t go to another funding body; we operate independently,” she said, pointing out that the school system is also losing about $70,000 due to federal spending cuts, primarily through sequestration. On top of that, she added, the system’s health insurance premiums are constantly going up. They will go up 5.6 percent in January and are expected to increase again in 2015. And if the system does not offer insurance to employees working more than 30 hours, it faces fines of up to $3,000 per employee.
“I care about our employees, and I care about their families,” Sexton said. “But I have to take care of the financial situation of this school system.”
In a Monday meeting with personnel being impacted by the cuts, Sexton said that employees will not be left to deal with insurance requirements on their own.
“We’re going to stay on top of this,” she said. “We aren’t just going to say, ‘You’re on your own. Good luck finding insurance.’ We’re going to continue to research it.”
Monday’s meeting included local insurance providers who fielded questions from employees about insurance availability.
The new health care law requires every American to have insurance coverage, or face fines of up to $2,000. Employees who are not offered insurance by their employer for various reasons can purchase insurance through a federal exchange. While much is unknown about those exchanges — with new details expected by October, according to Thomas — it is anticipated that individuals will be able to purchase plans that route for no more than 9.5 percent of their income.
Neighboring school systems are also looking at the dilemma of meeting the new insurance requirements. In Morgan County, Sexton said, the county commission has agreed to help the school system pay the additional costs. But, she said, there have been some indications that the commission may not be able to foot all the bill as an increasing number of employees sign on to coverage provided by the school system.
Additionally, the Scott County School System has implemented spending cuts as part of its budget for the 2013-2014 fiscal year in order to offset some of the anticipated expenses brought about by the new health care law. Those costs are expected to become more of an issue going forward.
The county system has also been hiring new non-certified employees as part-time rather than full-time employees.
As an independent school system that operates on a fixed budget with nowhere to turn for additional revenue, Sexton said there was no way to absorb the costs of the new health care law.
“We can’t raise taxes. We don’t have the authority to do that,” she said. “We can’t cut football and basketball. No one would go for that. We can’t go to the county commission and ask for more money. We have to maintain a budget based on what the county gives us (one-third of the money that is earmarked for education in Scott County) and what the state gives us.”
Thomas said that cutting expenses to create room for offering health care coverage to 75 non-certified employees would have also proven unfeasible.
“A lot of people say, ‘The school system has plenty of money; they can make cuts,’” she said. “But when you have a school system where 87 percent of your budget is salaries, when you make cuts, you’re cutting people. Could we have made cuts and provided insurance for every employee? Sure. But I can tell you that 35 to 40 people would have lost their jobs.”
Some non-certified employees will remain at full-time status, Sexton said. But, she stressed, it is the positions — not the employees — being protected.
“We had to protect some jobs from this because we have some people who have to be there full time,” she said. “The school nurse has to be there full time, anyone with access to sensitive student records has to be there full time, because we need someone at all times operating in those capacities.”[/s2If]