Published: November 21, 2009 10:37 pm      

Insurance switch costing schools

Area companies telling employee spouses to get coverage elsewhere.

When Superintendent Tracy Caddell builds his budget for Eastern Howard School Corp. each year, he allows for payment for a few more people on the insurance, knowing employees will marry, have children and require those people to be covered.

What he hadn’t planned for in 2010 was the possibility that employees spouses’ would be forced off their own employers’ insurance if they qualify somewhere else.

Caddell said he’s recently started receiving e-mails from employees, stating their spouses who work for Delphi and Howard Regional Health System have been told if they can get on their husband or wife’s insurance elsewhere, their own coverage will be terminated.

So far, the contacts are “sporadic,” he said, but “if it becomes a bigger issue, we’re going to have to look at this. ... My concern is, you’re having some private companies pushing off insurance costs to public entities, such as schools.”

Other Kokomo-area school corporations are reporting the same thing — Taylor has been contacted by seven employees whose insurance is being dropped by Delphi. Western has had one person switch to its insurance and four or five more asked about switching. At Kokomo-Center Schools, 15 employees have asked about enrolling in the school’s plan, one from Howard Regional and 14 from Delphi. Six employees have asked in the Southeastern School Corp. and Northwestern School Corp.

Maconaquah Superintendent Debra Jones said she’s had to put something in writing for one classified employee for Delphi, stating that the employee does not qualify for Maconaquah’s insurance.

Linda Ferries, communications representatives for Delphi, said it is not uncommon to make changes in benefits each year to reflect the current economy. She said Delphi employees may remain on the company’s insurance, but spouses who have coverage available to them from their employers should take that coverage.

“Delphi continues to offer what we believe is a competitive benefit package for our employees,” she said. “Each year, like every employer, Delphi reviews those benefit plans.”

Janet Knight, director of marketing at Howard Regional Health System, said the “spousal carve out” is nothing new, and the hospital implemented the program in 2007, “as a way to offset the increasing cost of our benefit plans.”

Knight said costs leveled out in 2008 and the “carve out” was removed.

It has since been re-started because “the current economy has forced more employees to add unemployed spouses to our plans which has, in turn, sent our costs spiraling upward.”

She said requiring working spouses of Howard Regional employees to enroll in their employers’ plans, “we are simply leveling the playing field so that other employers in Kokomo take a share of the costs for their own employees’ benefits.”

Knight said the Howard employee and his or her children may stay on Howard’s insurance, because “we have a responsibility to insure our employees.” She added that the carve out does not apply to a spouse whose employer pays less than 60 percent of his or her insurance premium.

Tri-Central Superintendent Lee Williford said several employees have enroll themselves and their children because their husband or wife’s insurance will now only cover that company’s employees, not their family members.

He said each family added to the plan costs the school corporation nearly $12,000 in insurance costs.

Williford said rumors are also circulating that the state is going to cut funding to schools.

Caddell said each family added to Eastern-Howard’s insurance costs the corporation $10,000 annually. Every five families added basically equals a teacher’s salary with benefits, he said.

“That’s just the school corporation cost. That does not cover what they have to pay,” he added.

Caddell said right now, his staff tells those who ask that they have closed enrollment, which means they can only enroll during a certain time period each year. However, some events, such as a marriage, birth of a child or spouse losing his insurance, qualify to enroll at times other than the enrollment period.

He accounts for a few of those qualifying events each year when building his budget, but said he did not plan for a large number joining in 2010. School officials submitted their proposed 2010 budgets earlier in the fall.

He added that the corporation cannot increase employees’ premiums to help make up the difference without negotiating with the teacher’s association.

“Our budgets are already very strained, and this is just adding to that strain,” Caddell said. “I would hate for any school corporation to have to cut teachers or services due to suddenly getting a rash of people having to join our insurance.”

• Danielle Rush is the Kokomo Tribune education reporter. She can be reached at 765-454-8585 or danielle.rush@kokomotribune.com.