District to Unexpectedly Save Nearly $1 Million on Healthcare

The District is set to receive a nearly $1 million unexpected windfall as a result of Obamacare. The new legislation apparently requires that healthcare companies spend 85% of healthcare premiums on actual healthcare. One of the healthcare companies our District contracts with, American Specialty Health (that’s the chiropractic plan for non-Kaiser employees), missed that threshold.

According to a letter sent to enrolled SDEA members by American Specialty Health on July 23:

“In 2011, ASHP spent only 60.6% of a total of $3,209,385 in premium dollars on health care and activities to improve health care quality. Since it missed the 85 percent target by 24.4% of premium it receives, ASHP must rebate 24.4% of the total health insurance premiums paid by the employer and employees in your group health plan. We are required to send this rebate to your employer or group policyholder by August 1, 2012 or apply this rebate to the health insurance premium that is due on or after August 1, 2012.”

What does this mean for SDUSD? Well, 24.4% of $3,209,385 is $783,090. That is amount SDUSD either received today, August 1, or that is the amount that they WON’T have to pay towards our healthcare premiums after all this year. Either way, that means the District just had an improvement to its balance sheets to the tune of $783,090.

We call upon the District to immediately use this money to restore the 41 remaining Early Childhood Educators who got left out in the cold in the last round of negotiations (not to mention the 83 K-12 teachers we were all told would be recalled when we voted on the TA but weren’t after all). And we call upon SDEA to push to make that happen NOW.

For teachers to give up a 7.16% raise and take an additional 2.7% pay cut in the form of furlough days while the District pads its coffers is not okay.

4 thoughts on “District to Unexpectedly Save Nearly $1 Million on Healthcare

  1. First, by law, the rebate goes to the “group policyholder.” VEBA is the policy holder, not SDUSD. By law VEBA receives the rebate not the district. Second, please read the American Speciality Health letter carefully. The amount rebated is for all coverage, “In California”. SDUSD is less than 20% of VEBA. SDEA members are less than 10% of the VEBA membership. I took the time to factcheck by speaking with VEBA and was told the total rebate for all VEBA districts is approxmately $400,000. SDUSD is less than 20% of VEBA so if the rebate went to the district it would be less than $80,000. Do the math. It’s one thing to challenge decisions made by SDEA. However, doing so based on bad math and false premises is quite another matter. In short, SDUSD received $0 in rebates not $783,090.

  2. Factchecker:
    I’m a member of the Breakfast Club and called VEBA to check on this information. American Specialty Health is issuing rebates to VEBA which would be passed along to the district in the form of a premium reduction. The information that I got from them was different to the information that you got, so if you could give me the name and number of the person that you talked to so that we can follow up we would appreciate it. So, in essence the district is saving some money but not necessarily the amount we previously projected.

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