Kansas task force to study unified health insurance plan for K-12 employees

? A new state task force has been formed to study the idea of putting all K-12 school employees in Kansas into a single, health insurance plan that would be run by the state.

That idea was first proposed in a 2016 efficiency study by the consulting firm Alvarez and Marsal, who said that putting all K-12 employees into a single, state-run high-deductible plan could save upward of $80 million a year.

But it’s an idea that has met strong resistance from teachers unions and other education groups, and so far it has not gained much traction in the Legislature.

“I don’t like the idea at all,” David Reber, lead negotiator for the Lawrence Education Association, said about the idea in an email. “A high-deductible plan might mean lower premiums paid, but would almost certainly also mean reduced benefits. Both of those would mean an overall reduction in the amount and quality of compensation for Kansas’ k-12 teachers. The last thing Kansas teachers need is reduced compensation.”

The task force is the result of a proviso inserted into this year’s budget bill, which said the group is to “study, review and develop a plan for … implementation and administration of a unified school district employee health care benefits program.”

The task force is organized within the Department of Administration. It includes two people appointed by the speaker of the House; one by the minority leader of the House; one representative of the Wichita school district, the state’s largest district; a member of the State Board of Education; another person appointed by the state board; and “members representing a geographic balance of the state appointed by the secretary of administration and any additional stakeholders as deemed necessary by the secretary of administration:”

In addition to a consolidated health plan, the task force is also charged with studying the idea of consolidating certain kinds of school district purchasing such as food and technology into a single, statewide system.

John Hutchinson, chief financial and operating officer of the Olathe school district, an appointee of House Speaker Ron Ryckman, R-Olathe, has been named chairman of the task force. He said Monday that it’s not yet clear how much savings are to be had by consolidating those programs.

“We have to gather some of the information for both of those tasks that we’ve been charged with,” he said in a phone interview. “A lot of districts use cooperative purchasing already, and there are some benefits to that, so we’ll explore whether or not we can gain even more efficiency across the state on some of these other items.”

Appointments to the task force were only recently completed, and the group has not yet had a formal meeting. But it is supposed to issue its report in January when lawmakers reconvene for the 2018 session.

Republican Gov. Sam Brownback endorsed the idea of a unified health plan for school employees, and he put the estimated savings from such a plan into the budget proposal he submitted to the Legislature in January.

Lawmakers, however, balked at that idea, saying there wasn’t enough time to implement such a plan this year, and they wanted further study of the issue.

A Legislative Post Audit report released in February said putting all K-12 employees into a single plan likely would save a considerable amount of money, but only about 60 percent of the savings would be the result of increased efficiency. The rest, the report said, would result from “shifting costs to employees.”

“Having districts join a consolidated plan creates significant opportunities for savings through increased plan efficiency which would likely have little effect on employees,” the report said. “However, consolidation may also result in changes to coverage levels or employee contribution rates. These changes can shift healthcare costs from the district onto its employees or vice versa.”

Currently, health insurance benefit plans are negotiated between school districts and teachers. In fact, along with salaries, benefit packages are among a handful of items that Kansas law requires school districts to negotiate with teachers.

Mark Tallman, of the Kansas Association of School Boards, said that has resulted in a diversity of health plans offered among the state’s 286 school districts because benefits are often the result of trade-offs in salary negotiations.

“So you can really only look at the total value of the health insurance plan if you’re also looking at salaries, and all those decisions are made locally,” he said in a phone interview. “Our concern is, how would you structure a plan that respects all of the trade-offs and discussions that have gone into developing these local plans?”

The Lawrence school district operates a self-funded insurance plan, and the district pays all of the premiums of employees who work at least six hours a day, although employees have to share in the cost of adding a spouse or children to their policies.

“I believe this is the best way to provide competitive compensation packages that meet the needs of both parties to the teaching contract,” Reber said.