Friday, February 13, 2015

The Time Has Come for a Statewide Health Insurance Plan for Public School Employees

For years VEA has been fighting for a statewide insurance option for public school employees.  The Compensation and Retirement Subcommittee of the House Appropriations Committee will be voting on this issue (SB866 Chafin/Vogel) on Thursday afternoon.  The bill came out of the Senate on a strong bipartisan vote, but in years past it has been killed by this committee.

Why do we need this bill?

Moving to a statewide insurance option for local school divisions and local governments could save millions of dollars for the state, localities and employees in the years ahead.  In addition, it would provide a high quality insurance option to small divisions that endure volatile rates and little bargaining leverage with insurance companies.

The Joint Legislative Audit and Review Commission estimated that implementing such a plan for the school divisions alone would save $44 to $66 million annually. These savings could be used to provide needed school funding.

The Commonwealth would have much greater leverage in rate negotiations with insurance providers than any one of the 132 individual school divisions.  Smaller localities would benefit the most – benefiting from the increased bargaining leverage (market power) and rate stability of a larger pool of employees.  In addition, savings are achieved as administrative and procurement costs are eliminated.

SB866 provides an option to local governments and school boards.  Participation is not required under the provisions of the bill.

This plan offers a substantial “cooperative procurement” opportunity to school divisions.  When JLARC last examined this issue in 2010, school divisions in Virginia were spending $0.9 billion on health insurance.  JLARC identified health insurance as the “area of greatest potential savings” for school divisions.  As health insurance is funded in part by the Standards of Quality, any savings are to the benefit of the localities and the state.

In 2010, JLARC reported that, “At least 25 states allow or require public school divisions to purchase health insurance through a statewide pool. Some states pool public school employees with all state employees and share the same experience ratings and premiums between groups. Other states create separate pools with unique experience ratings and premiums for school employees and state employees.

Please call the offices of this subcommittee’s members and leave this simple message:  “Please vote for SB866.”

Delegate Charles Poindexter      (804) 698-1009 

Delegate Riley Ingram                    (804) 698-1062

Delegate Scott Lingamfelter        (804) 698-1031

Delegate Tag Greason                   (804) 698-1032

Delegate Scott Garrett                  (804) 698-1023

Delegate Johnny Joannou            (804) 698-1079

Delgate Daun Hester                      (804) 698-1089

I have also included their email addresses in the event that you would prefer to send an email message.