Wisconsin Act 10’s Rein on Monopoly Bargaining is Paying Off

Wisconsin’s Act 10’s curb on monopoly bargaining is demonstrating how school districts can manage themselves much better without the practice.  CEAFU has done several studies  on the cost of monopoly bargaining to taxpayers and school districts. Act 10’s implementation is further confirming the benefit when taxpayers take school districts back from teacher union officials and put elected officials back in charge of school districts.    WEAC is the largest state union, formerly prime provider of health care insurance to Wisconsin teachers.

Dorothy Jasperson-Robson has the story in the Lacrosse Tribune.

When the stars align perfectly good things happen.

That was case for the Westby Area School District on April 19, when the administration learned that the school district will be able to cover the remaining projected $257,000 deficit for the 2013-14 school year, thanks to a 15-percent health insurance premium reduction from Gundersen Lutheran Healthcare effective July 1, 2013, plus money the district will save by not having to utilize money they had already built into the 2013-14 budget for projected health insurance premium benefit increases.

In keeping with past precedent, the 2013-14 proposed  budget included a 14 percent health insurance premium increase for the upcoming school year. However, the actual renewal rate the school district will pay in 2013-14, will be decreased by 15 percent, compared to the 2012-13 premiums.

The premium reduction is largely attributed to a positive claims ratio and low utilization, as well as adjustments to a few actuarial estimates from Gundersen Lutheren.

Gundersen Lutheran based its initial  2012-13 health insurance contract on premiums the school district had previously paid annually to WEAC.

WEAC is the former state-based company that handled insurance coverage for school district union employees prior to the implementation of Act 10, at which time the school district contracted with Gundersen Lutheren, not WEAC.

With WEAC, the district had been on a near consistent cycle of 10 percent or more increases in healthcare costs annually. Additionally, the district was advised by its insurance consultant that a 10  to 12 percent increase would in no way be out of the ordinary, as businesses began projecting their next year’s budget. Based on this information, Westby projected a 14 percent increase in healthcare costs, which gave the district a measure safety net in case rates increased even more.

Norton said the news from Gundersen Lutheran was completely unexpected, but very welcomed by the school district, as it struggles to find further reductions for the 2013-14 school year and beyond, without negatively impacting the district’s quality of education.

The savings the school district received for the upcoming school year allowed the school board to rescind the preliminary notices of non-renewal the Board of Education had approved issuing on April 15, to the three school district counselors, as well as the one full-time teaching position at Coon Valley Elementary.

The savings also allows the school district to work on an alternative plan of action in regards to health insurance premiums for district bus drivers who were looking at a 50 percent premium charge, which may now be reduced to 25 percent.