Health trust is depleted

Board approves advancing funds

“As a board we’re always looking to save money, but we also need to look out for the best interests of our employees.”

— Lorain School Board President Tim Williams

Lorain City School Board approved advancing funds to August 2017 because of a depleted Health Trust.

“The advance would occur if anticipated health trust expenses exceed the anticipated monthly health trust revenue,” according to Lorain Schools Treasurer Joshua Hill.

The advanced amount would be divided equally and deducted from remaining months left in the year, Hill said.

“We are assessing our health care package,” Lorain School Board President Tim Williams said, adding health care is important to every family who has someone working in the district.

“We know there are lots of challenges with status of health care in this community, in this country, with escalating costs,” Williams said.

Two board members have a background in insurance, he said.

“This is something we knew

needed to be addressed,” Williams said, “but quite honestly never had we really picked up the thing, grabbed the bull by the horns and started digging into it for lots of reasons. We needed to assess: Is this the most efficient thing? Are there other opportunities? Are there savings that could be gained? And so we have begun an investigative process. We brought in some consultants. We’re trying to get information from the trust. (Hill) has been very instrumental because he had to do this in a previous district he was in. So he brought some best practices, some expertise. Jim Smith would always offer some insights. In addition Mark Ballard has some understanding into this.

“So all of that has come together,” Williams said. “Our health trust is in a very compromised state. Escalating costs. Did I understate that? Yes, spiraling costs, benefits. People are sick. People need to be healthy and that costs money. So we’re really looking at that. What is happening is that our trust is in a state where they are about to run out of resources.”

The board members spoke cautiously because not all of the information is public record, he said.

“This needs to be a public conversation,” Williams said. “As a board we’re always looking to save money, but we also need to look out for the best interests of our employees.”

The health trust wanted to borrow money, Williams said.

Lorain Schools Superintendent Dr. Jeff Graham said the trust had enough money to pay for June.

Hill said a woman who handles the health trust said recent claims for this month are stabilizing, and

claims for May came in under budget, so the trust is OK for June.

The legislation would allow Hill to advance money to the trust if needed, he said.

“We would give them more up front money, and less spread out,” Hill said.

School Board member Jim Smith said the health insurance for district employees and their families is self-funded, meaning if it runs out, each employee is on the hook to pay money into the system to bring it to solvency.

“We do have something with Medical Mutual for really big claims,” Smith said. “But the run-of-themill everyday claims are paid out of the trust fund. This happened a number of years ago in the county when their plan went bust.”

Smith recommended finding savings, and using the money saved to benefit employees through a health savings plan, which allows money to roll over each year, and eventually to roll it over into an IRA at retirement.

School Board member Anthony Dimacchia said the legislation is “a very small (bandage). We’ve been talking about this for 10 years. We knew this day was coming.”

Williams said the board does not want people to think they’re going to lose their insurance.

“We can’t deal with this in a vacuum,” Williams said. “This is a healthy conversation. Yes, we have urgency. We can’t kick this can down the road.”

Graham said the health care trust is the health care plan.

“On the current trajectory it isn’t stable long term,” Graham said. “I’m not sure it’s stable in the short term. We need stopgap measures. We need a short-term plan to get us to a long-term solution. The whole idea tonight was to acknowledge we have an issue that we plan to address.”