At the October 23, 2006 meeting of the Human Resources Committee for the Madison School Board, I reported on why the Board of Education and employee representatives should work together to reduce future health insurance costs.
With one exception, my data came directly from the September 25 presentation by Bob Butler, attorney-consultant for the Wisconsin Association for School Boards. Madison School Board HR Committee: Health Care Costs Discussion What’s new in my presentation [880K pdf version]is the cost for employee health insurance in 2006-07 ($43.3M) and the portion of this year’s budget that goes to pay for health insurance (13%).
Here’s the short version of my presentation.
Reason 1: Health insurance costs for school districts are increasing at higher rates than for the private sector or other government employers in Wisconsin.
Reason 2:
 The percentage of the district’s operating budget that goes to health insurance is large and growing rapidly.

  • $43,303,350 will go to employee health insurance for 2006-07

  • 13% of the total budget for 2006-07 will go to employee health insurance
  • 17% of the budget under revenue limits will go to employee health insurance

Reason 3: Spending more and more on health insurance means that the district must go to strategies such as cutting positions, not replacing employees that retire, increasing class sizes, or creating positions that do not qualify for health insurance in order to balance the budget.
Reason 4: Health insurance costs are drastically reducing dollars that can go to pay competitive wages.
Reason 5: Health insurance costs are also drastically reducing post-retirement benefits to our employees.
Reason 6: Changes in providers and plans can significantly affect future costs.
Reason 7: Districts can have a significant impact on future health insurance costs by working with employee representatives to propose changes in plan designs, providers and wellness plans.



Following discussion, the HR Committee passed the following motion: “the Human Resources Committee recommends that the Board of Education direct the administration to provide recommendations about how the administration could communicate information regarding employee health insurance costs to all district employees and the public. The information should address the following:

  1. Health insurance costs for school districts are increasing at higher rates than for the private sector or other government employers in Wisconsin;
  2. The percentage of the district’s operating budget that goes to health insurance is large and growing rapidly;
  3. Health insurance costs are reducing dollars that can go for paying competitive wages;
  4. Health insurance costs are also reducing post-retirement benefits for our employees;
  5. Changes in providers and plans can significantly affect future costs; and
  6. Some Wisconsin districts have reduced future health insurance costs by working with employee representatives to make changes in plan design, providers, wellness programs and other aspects that reduce future costs.

(Kobza and Robarts voting yes, Vang voting no). This is an unofficial statement of the motion passed. The committee will not vote on the minutes until our November meeting.