South Windsor Town Manager, School Superintendent Disagree Over Health Care Shortfall

South Windsor’s two most prominent employees are locked in a disagreement over how the town employees’ health care costs are paid.

Specifically, Town Manager Matthew Galligan and Superintendent of Schools Dr. Kate Carter are currently trying to work out how to cover a $700,000 shortfall in the town’s employees’ self insurance fund.

“Right now, we agree to disagree,” Galligan said.

In an interview on Tuesday, Galligan said that the town converted to a self-funded insurance pool about eight years ago, which has resulted in saving taxpayers “millions of dollars” during that time.

According to Galligan, the 1,000 or so South Windsor employees - both on the town and the school sides - are pooled together for insurance purposes. Instead of paying insurance premiums to a private company, the town sets aside the cost of workers’ anticipated claims for each year, then pays only for employees’ actual usage.

This year, the town’s employees - i.e. Town Hall, public works and police officers - accounted for more than their normal share of claims against the fund, while the schools have had a lower than expected number of claims.

The town and the schools each have a reserve fund for their insurance claims. The dispute lies in how those reserve accounts are used in the event one encounters a shortfall.

In the past, according to Galligan, in the the event of a shortfall, the schools would just pay out of its reserve fund the additional claims that were generated from the town side. And, if the situation was in reverse, the town would cover the schools claims out of the town’s reserve fund, Galligan said.

But the school district believes that any additional claims that are made by the town employees should be covered by the town through its self-insurance reserve, not from the school’s reserve account.

South Windsor Board of Education Chairman David Joy said at the Town Council’s meeting on Monday that the school board takes great care in creating a reserve to cover three months of claims for its own employees.

“We believe [the town’s reserve fund and the schools’ reserve fund] to be two different resources,” Joy said. “We maintain a three month balance for claims in [the schools’ reserve] account, but not without sacrifice.”

Joy said that the town should “look in the mirror” when it comes to having a depleted reserve account.

But Galligan said that, going forward, the schools have also taken the position that any rise in costs should not be spread across the entire pool, but should be calculated based on where the claims come from.

So, instead of calculating an 11 percent increase in health costs across the board - which is what the town’s health care consultant Ovation is predicting - the town would have to pay a 22 percent increase while the schools would pay an 8 percent increase, according to Galligan.

Galligan said that not only would that defeat the purpose of having one self-insurance risk pool for all employees, it is a complete break from past practices that he has had with other superintendents on this issue.

“If the policy of the school board is to keep that money, we can’t value the plan as one plan any more,” Galligan said.

What’s more, Galligan said that Dr. Carter’s and the schools’ position was in direct contravention to the “One Town, One Future” mantra that Galligan supported.

But, Joy replied, “‘One Town, One Future’ does not mean everything comes from one pot of money.’”

Galligan noted, however, that if he were to take a similar stance as the schools on other budgetary issues, then debt service for school projects should be moved over to the schools’ side of the ledger.

But Dr. Carter said that, contrary to Galligan’s claim, her position on how the reserve accounts is how they have always been utilized. Dr. Carter was clear in noting that she has a good working relationship with Galligan and that this has been handled in a professional manner.

Mayor Tom Delnicki said during the council meeting that he would call a meeting with two representatives from the school board and the council, as well as Dr. Carter, Galligan, the finance directors from the town and the schools and a representative from Ovation to see if some resolution could be reached.

In the meantime, Galligan said that he was looking into other options to insure the the 178 town employees, including going back to premium-based insurers or joining the state self-insurance pool.

“All options are on the table,” Galligan said.