Carol Minnaar's Letter
CAROL MINNAAR’S LETTER TO JOHN BURDICK OF THE HOLLAND SENTINEL:
January 23, 2006
Mr. John Burdick
The Holland Sentinel
Dear John,
Thank you for giving me the time to provide you and your editor with a comprehensive description of the two Blue Cross plans that will take effect March 1 concerning the HEA, and to answer the three questions posed to me in your January 20 email.
First, the Blue Cross plans are the identical plans in which all eligible District administrators and non-union support staff participate. For example, the Superintendent and I are covered by these very plans.
I know that change is very hard, and when it comes to changes in insurance benefits, uncertainty and anxiety are always higher with public school employees who, for so long, have had the opportunity to receive fully paid insurance benefits with relatively lower drug copays and related costs than most other employee groups. Last year, Holland Public Schools employees only had a $2 drug copay. Now it is a $5/$10 drug card. I can understand why employees are reluctant make such changes in coverage.
As one of the few employees at Holland Public Schools who has worked in both the private and public sector, I can tell you from personal experience that the MESSA insurance benefits enjoyed by Michigan public school employees are great benefits. However, the Holland Board can no longer afford the cost of that coverage.
The District’s insurance consultants, Advantage Benefits Group, tell us that the two plans we are offering are better than the coverage that 90% or more of employees in Western Michigan receive in their workplaces now. The District is very pleased to have put together two plan options that offer quality benefits and yet are affordable for the District with no monthly cost to the employees.
Second, employees will be able to choose which plan is best suited for them and their families. The District is offering six (6) informational meetings for employees and their spouses to give out important information to help them make this choice. Representatives of the District’s insurance consultants and third party administrator will
be there to provide information about the plan benefits, and to answer employee questions.
Employees will learn that the health components of these plans include either (1) a Community Blue PPO plan with a Healthcare Reimbursement Arrangement or (2) the new Blue Cross Blue Shield Flexible Blue Plan #2. These are the same plans that the District has been proposing to the HEA. There is no monthly cost to employees for either of these plans, as the monthly premium cost does not exceed $1085.00 this school year.
The BCBS PPO Plan with HRA-Option 1
If employees have a lot of medical expenses, they may feel more comfortable with this plan, which I call the HRA plan. Under this PPO plan, there is a high deductible, but the district is fully paying for the deductible through a reimbursement process to be administered by the TPA. The TPA is ASR, a large and experienced third party administrator that handles a number of large employers in Kent and Ottawa Counties, including the Ottawa ISD.
Under this plan, there is a $10/$40 drug card. The cost in prescription drugs will vary from employee to employee and will depend upon the number of monthly prescription drugs and whether the drug is a generic or brand name drug. I cannot predict how this change will affect HEA staff because the District does not have access to claims data for its employees. As you probably know, MESSA does not release claims data and so the District could not design a plan with knowledge about actual claims history for the HEA. With the Board being the policyholder, the Board’s ability to design benefit coverage will improve as it will have access to general claims information. As before, individual claims history is protected by privacy laws.
The Flexible Blue Plan 2 – Option 2
The Flexible Blue Plan is a health savings account (“HSA”) also with a high deductible. However, as the Board’s bargaining team has explained in writing and verbally to the HEA bargaining team, the District is fully paying for the deductible for the 10 months they will be covered this year. Next year the deductible will be paid for the entire year.
Each month, the District will deposit 1/12th of the deductible amount into an HSA account that is owned by the employee. The HSA may also be spent on health-related expenses such as contact lens solution, cough syrup, lasik eye surgery and the like (all qualified expenses are listed in IRS Publication 502.) If the HSA grows over time, the employee at retirement may use the account for post-retirement medical expenses, such as paying for monthly premiums for the insurance provided to retired Michigan Public School Employees through the MPSERS system. The money does not revert back to the District at any time.
The HSA covers prescription drugs just like all other medical expenses. Once the deductible is spent, the plan covers eligible expenses on an 80/20 basis if the provider is in the Blue Cross network, up to an annual maximum. Like most insurance plans, provided that the employee stays within the network and does not incur costs beyond
what is reasonable and customary, the out of pocket cost each year should not exceed the annual amount of the coinsurance. The annual coinsurance amount is $2000.00 per family or 2 person, or $1000.00 per single person.
Comparison to MESSA Plans
Under the current MESSA Super Care 1 plan, the drug card was a $5/$10 drug card, however, the cost to the employee for that plan was $195.00 in January and February of 2006, the amount by which the monthly cost of Super Care 1 exceeded the $1085.00 the Board can afford this school year.
Under the MESSA Choices II plan, a PPO plan insured by Blue Cross and Blue Shield of Michigan, the drug card was also $5/$10, and the cost to the employee was $50.63 per month. With the Blue Cross plans; there is no monthly premium cost to the employee.
As you probably know, the HEA has offered to move all employees to the MESSA Choices II plan, a PPO plan insured by Blue Cross and Blue Shield of Michigan. I attached a comparison of the plans we prepared and gave to Mr. Craig Culver, the MEA Uniserv Director assigned to the HEA, at our recent negotiations session.
In our opinion, the Blue Cross plans are not “significantly inferior” to what the teachers had before. We certainly would not offer “significantly inferior” plans to our District administrators or non-union support staff. The Superintendent and I have no desire to participate in such “significantly inferior” plans.
Can the Board still offer MESSA as an option?
From the beginning of negotiations last spring, in light of the District’s fiscal condition and three years of flat State funding while “legacy” and energy costs escalated, the Board had communicated the need to achieve cost containment on insurance costs by 2006. Until very recently the Board consistently offered either the MESSA plans, at a monthly cost to employees, or, at no monthly cost to employees, the two high quality Blue Cross
plans that I have described.
In fact, as recently as October 26, the Board made a Final Offer to the HEA. In the Final Offer, the Board proposed two options. Option A allowed the HEA to choose either MESSA Super Care 1 or Choices II, provided the employees paid the difference between $1085.00 and the actual cost for those plans. Option B proposed the two Blue Cross plans going into effect on March 1. The HEA rejected both options.
As of the last bargaining session on December 14, the HEA was still proposing a fully paid Choices II plan at a monthly cost that exceeds $1085.00. Another bargaining session is scheduled for January 25.
I hope that this information responds to your questions. Please feel free to call me at any time to clarify this situation, or to answer any questions. Thank you for your newspaper’s continuing interest in the fiscal solvency of the Holland Public Schools.
Sincerely,
Carol Minnaar
Director, Human Resources
Holland Public Schools
The HEA recently scheduled an after school party for its members. During that party, the HEA had forms available inviting employees to file claims against the District challenging the payroll deductions of these monthly costs. With the Blue Cross plans; there are no monthly deductions from an employee’s payroll. I am attaching the Board’s October 26, 27 and subsequent proposals and counterproposals. Let me know if you would like copies of the HEA’s proposals covering the same time period.
