• August 2, 2014

School districts brace for health care costs

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Posted: Sunday, April 28, 2013 4:30 am

Local school districts planning their budgets for the 2013-2014 school year are grappling with new federal health care regulations to avoid facing millions of dollars in penalties.

The Killeen Independent School District Board of Trustees received a report on the impact of the federal Patient Protection and Affordable Care Act at a Tuesday workshop.

While many of the act’s provisions kick in next year, Killeen ISD chief personnel officer Steve Cook said many of the regulations are still being hammered out by various federal agencies, leaving districts planning their budgets in a tough spot.

“There’s not a lot of guidance coming out of the federal government,” Cook said. “Health and Human Services, the Department of Labor (and) the IRS are all writing the rules, but they haven’t finished yet.”

According to Cook’s presentation, one of the more difficult parts of the act to implement will be a provision that calls for large employers with 50 or more employees to offer benefits to employees who average at least 30 hours or more per week.

Cook said complying with the regulation when it comes to employees who work variable hours, such as substitute teachers, could prove difficult.

“We have to determine a way to take a look at all employees that fall into this category,” he said. “You determine who those folks are, and get them enrolled for benefits.”

The Killeen district currently does not offer benefits to variable hour employees. According to information provided by the district, Killeen ISD has 6,087 employees who work more than 30 hours a week. An estimated 200 of those are substitutes who work variable hours and meet the 30-hour criteria.

“It’s going to take some work to try to track and automate these folks,” he said. “It’s very challenging.”

If the district fails to identify and offer benefits to those 200 employees, it would face severe penalties of up to $12.5 million.

“It seems pretty harsh,” Cook said.

Killeen isn’t the only school district wrestling with complying with the nation’s new health care laws.

Copperas Cove

In addition to having to comply with many of the same regulations as Killeen, the Copperas Cove Independent School District’s Board of Trustees voted this month to increase contributions to health care for the 2013-2014 school year.

According to information from the district, the increase will result in increases from $0 to $149 for employee-only coverage, depending on the plan selected, and employee and family rates would increase from $14.14 to $388.

The trustees also voted to increase the district’s contribution to employees’ health benefits from $398 to $408 per employee per month for the 2013-2014 school year, a total increase of $96,000 per year.

At an April 9 workshop, Cove ISD’s Executive Director for Human Resource Services Barbara Tate said at least some of that increase could be attributed to the new federal health care laws.

“Some of this is the Affordable Care Act,” Tate told board members. “There are some hidden things in there.”

Other provisions of the act that could effect school districts include limits on contributions to flexible spending accounts (which Killeen ISD and Cove ISD both offer employees), and the mandate that required contributions toward premiums for employees not exceed 9.5 percent of their household income.

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