Could Reducing Insurance Costs Save Racine Unified Jobs?

A question loomed in minds of the Racine Unified School District Board of Education members at a special meeting held Tuesday about health care savings opportunities.

Was there a way to cut insurance costs -- without cutting the already pared benefits -- to help loosen up enough money so that the district wouldn’t have to make staffing cuts?

The short answer was yes, but it may not be enough for the 2011-12 school year.

Racine Unified has a $7.5 million hole to plug for the 2011-12 budget and district administrators proposed cutting 125 full-time positions. But they wanted to see if any savings could be earned by partnering with a cost management company to spare some of those jobs.

In March, staff gave up health care, wages and insurance benefits to save $17.5 million after the state budget proposed budget called for a reduction of $25 million in state aid.

“I feel very bad about what we’ve done to our employees with cutting their benefits,” said Pamala Handrow. “Yeah they had a pretty nice plan, but they’ve gone from feast to total famine. Is there a better way to provide benefits without the high deductable plan? But we also have these budget constraints. How do we offer good benefits to encourage people to work here?”

The district has self-funded their insurance plan since 1993 and don't use the WEA Trust for insurance.

District officials talked to several consulting firms Tuesday to see what cost savings they could come up with.

Daniel Burkwald, who owns Burkwald & Associates, a benefits and management consulting firm, told the Board he has saved the Kenosha Unified School District millions through cost containment measures.

“What we were able to do was have a more engaged, more involved employee population that has a better understanding of the benefits they have and we’ve done that through a number of different vehicles… but we’re helping people become better consumers of health care,” Burkwald said.

Burkwald told the group that Kenosha Unified was seeing double digit increases in health care costs, but when they started wellness groups and task forces they were able to lesson those cost increases significantly.

School board members brought up concerns about when those savings could be realized. Burkwald said he would have to take at a variety of factors before he could make that call, but said overtime there would be a savings.

Several other consulting firms also attended the meeting.

The next step for the district would involve a meeting where the Board of Adjusters look at doing at drafting a possible request for proposal, which is slated for June 1.