School Board Wrestles With $9.4M Health Care Fund Shortfall

The Manatee County School Board spent a lot of its time discussing problems with the school district’s employee health care plan at its Monday meeting.

Tim McGonegal, superintendent of schools, gave a presentation outlining the dire situation the Manatee County School District self-insured fund faces.

Benefit claims on the fund were greater than the premiums the district and its employees were contributing over the last four years, creating a more than $9.4 million shortfall.

The board approved in 2010 a three-year plan to increase premiums on all employees starting April 1 to bring the plan into the black again, but several roadblocks kept getting in the way.

Negotiations with the district’s two unions — the Manatee Education Association, which represents teachers, and the American Federation of State, County and Municipal Employees, which represents custodial, bus drivers, maintenance and food service workers — were declared at an impasse.

The impasse sends the disagreement with the unions to a magistrate to decide, and that decision is not expected until the end of April.

So the board approved McGonegal’s recommendation in a 4-1 vote to delay the collection of the increased premium payments from non-union and union employees until the magistrate issues a decision.

Board member Julie Aranibar, who voted against the motion to delay, said she did not support the three-year plan, and that voting on the postponement of premium collection will not solve the problem of the shortfall.

“I’m not comfortable in asking employees to put money into this plan,” Aranibar said.

She said the plan was flawed and the vote should be tabled until McGonegal brings the board a consensus of the employees on the plan.

Board Chairman Robert Gause said tabling the issue would be the same as a no vote because the plan rules call for deductions to begin April 1.

During the public comment portion of the agenda, several people said the shortfall problem was caused when the past board did not raise the premiums four years ago.

They said that decision was based on political reasons because an election was looming, and the incumbents wanted the support of the teachers.

Board Member Barbara Harvey took exception to those accusations.

“When decisions were made, it was not political,” Harvey said, “but for the best interest of the employees.”

She said the board was presented with several options, and the one they chose at the time was considered the best plan to work.

“A lot of plans just don’t work as they should,” Harvey said.

McGonegal said during his presentation that when the fund was short $700,000 in 2007 the board increased the premium costs to the employees 5 percent.

But the following year the fund experienced a $4 million deficit in the plan fund, and the board made plan changes, such as increasing the deductible and instituting a Medicare Advantage plan.

In 2009, the fund fell $2.3 million short, and the board took more corrective steps to the plan.

Then last year it hired a consultant and approved the three-year plan with the increased premiums that were to start April 1.

Aranibar said she would prefer the school board change from a self-insured fund to a fully funded system, where an outside insurance firm underwrites a policy.

“We’re supposed to be in the education business,” she said, “not insurance. This is taking up too much of our time."

McGonegal said he planed to ask the board to put the school district health care plan out to bid in 2012.