The Leavenworth school district could see significant increases in health insurance costs resulting from the federal health care reform law.
When board members met Monday, Yvonne Frame, a client executive with district insurance provider Haake Companies, reviewed estimates of how much more the district could end up paying for the 2014-2015 school year. By keeping the current plan strategy, the cost could increase by about $1.5 million. More than $1 million of the additional cost would result from penalties associated with the district's insurance plan being deemed "unaffordable" or "insufficient" for some employees.
The district can make changes to avoid these penalties, but there still would be additional costs associated with this plan. Under this scenario, the district still could pay about $1 million more than the current cost.
"It's going to require certainly creative strategies," Frame said of dealing with the new regulations.
Frame said many of the changes as a result of the federal Patient Protection and Affordable Care Act will be implemented in 2014. But many of them won't affect the Leavenworth district until it renews insurance for the 2014-2015 school year.
"We're almost a year and a half out," she said.
She said one thing the district needs to focus on is the affordability penalty. She said the district could face a penalty of $3,000 per each employee who receives a tax credit to participate in a health care exchange.
She said this situation could result if the district's health insurance plan exceeds 9.5 percent of the income of employees who are making less than four times the federal poverty level.
She said this could apply to about 360 employees.
Board member Nancy Klemp asked if this means the district would have to pay $3,000 multiplied by 360.
"Potentially," Frame said.
She said there is a safe harbor to avoid the penalty which involves a cap of 9.5 percent of the federal poverty level.
She offered other alternatives that can be looked at to help reduce costs.
In other business
When they met Monday, Leavenworth school board members took the following action:
They approved resolutions to notify three employees of an intent to not renew their contracts for the 2013-2014 school year. The three employees are Cheryl Snead, Drew Burkey and Marvin Francisco. Burkey and Francisco are not tenured employees, and no reasons were given for not renewing their contracts. Snead is an a tenured employee and reasons were stated in a resolution regarding why board members do not intend to renew her contract.
They passed a resolution upholding a hearing officer's earlier decision to suspend a student for a year.
Page 2 of 2 - They approved a staffing report. The report lists various personnel changes. The report passed 4-3 with board members Mo Minchew, Loyal Torkelson and Nancy Klemp voting it.
They had a presentation about an online Board Docs program that may be used in the future to manage information related to the school board.
They recognized students for various achievements.