Schools’ health costs for retirees double

Thursday, May 13, 2004 | 10:57 a.m.

The Clark County School District's monthly contributions to health care costs for retired employees have more than doubled to $345,328, thanks to a new state law and changes to health care plans offered by the district's teachers' union.

During the last legislative session lawmakers passed AB 286, which required public agencies to increase their contributions for retiree health care costs. And in August, the Teachers Health Trust told 550 retirees it had become too expensive to subsidize their existing coverage. The retirees were given the choice of enrolling in one of three other plans or signing up with the state.

Since then the number of school district retirees enrolled in the state plan has more than doubled to 1,059 from 456, said Walt Rulffes, deputy superintendent of operations for the district. That raised the monthly payment as of April 1 to $345,328 from $148,313, Rulffes said.

The annual cost to the Clark County School District is expected to top $5 million by next year, Rulffes said. In part because of those increased costs Rulffes said he has recommended to Superintendent Carlos Garcia that unnecessary expenditures be put off. That included plans to add three assistant regional superintendent positions at a cost of $300,000 annually in salaries alone.

"We don't know what kind of help we're going to get from the state on this, and until we do caution is the right approach," Rulffes said.

The bill was passed without a note attached explaining the fiscal impact for school districts, said Doug Thunder, assistant superintendent of finance for the Nevada Department of Education.

"In the normal course of events the Legislature would have considered notes from all the public agencies, but in this case that didn't happen," Thunder said.

The cost to school districts is estimated at $3.8 million for the nine months since the law took effect and the amount will increase next year as more retirees sign up for the state's plan, Thunder said.

State and local education officials will petition the Interim Finance Committee at its June 16 meeting for funds to offset the cost of the new statute, Thunder said.

Peter Alpert, who oversees the Teachers' Health Trust, said Wednesday his organization is also willing to lobby lawmakers on behalf of the school district.

"We think there should be some relief there," Alpert said.

The majority of the retirees with the Health Trust chose the state's plan because it was ultimately less expensive when the district's subsidy was factored in, Alpert said.

A more fair method, Alpert said, would be for the district to make subsidy payments to whichever health plan the retiree chooses.

"It's not fair that nobody but the state gets that subsidy," Alpert said. "If those dollars had come to the Health Trust, we could have afforded to keep the retirees on their existing plans."

AB 286 amounts to an "unfunded mandate," said Assemblywoman Chris Giunchigliani, a member of the Interim Finance Committee and a former special education teacher in Clark County.

The state has separate health care plans for active employees, retired state employees and retired employees of non-state public agencies.

"Should we come up with a policy that says we privatize the state plan and only allow state employees to enroll?" Giunchigliani said. "Or do we say there's one plan for all public employees and everyone has to pay into that?"

Retired teacher George Appleton, who resisted the loss of his original coverage with the Teachers' Health Trust, said he switched to the state plan April 1.

Appleton, 77, said he and his wife paid combined premiums of nearly $800 a month to the Teachers Health Trust. But because he and his wife both retired from the district before 1994, the district's subsidy covers their entire premium for the state plan, Appleton said.

More importantly, Appleton said, he has been able to keep most of his preferred physicians including his cardiologist. Medicare helps cover the increased cost of prescription drugs on the state plan, Appleton said.

"We're in a learning curve here but I would say so far, so good," Appleton said.