One Side of the Phone Conversation

I’ll start by thanking Pat Crowley for taking the initiative of putting some actual details out there for consideration. Having read through his description of the NEA-Tiverton’s healthcare proposal — doing my best to see past his ham-handed spin — I find I can only say that it’s not enough information. Given the privacy of the negotiations and the lack of information about the other side’s response, there’s simply no way of knowing how this proposal fits in with the overall discussion.
As a starting point of explanation, consider this:

A High Deductible Plan is coupled with a Health Savings Account. Because the Tiverton School Committee would be responsible for funding 50% of the HSA, the actual year 1 savings in real dollars to the tax payer is more than $185,000.

Unless my understanding is mistaken, it makes no sense, in this context, to speak of funding some percentage of an HSA. There’s only a maximum contribution to such accounts, not a minimum or required amount. According to the site to which Pat refers readers for further description of HSAs in general:

For 2007 and forward, your maximum annual HSA contribution is based on the statutory limit for your type of coverage. For 2007, if you have self-only HDHP coverage, your contribution is $2,850; $5,650 if family HDHP, no matter what your HDHP deductible is. Before 2006, the contribution could not exceed the deductible of your HDHP. If you are age 55 or older, you can also make additional “catch-up” contributions (see below).

How this fits in with the data in his spreadsheet is impossible to determine. He notes, thereon, that the teacher’s HSA contribution for an individual plan would be $750 and for a family plan would be $1,500. The nature of HSAs, however, makes this number arbitrary (unless the specific plan, which he does not provide, makes it not so). If the HSA is underfunded, necessary health expenses below the deductible must simply be paid out of pocket.
A teacher on an individual plan who doesn’t spend more than $750 each year (assuming that the district’s “50% contribution” is that much) wouldn’t pay a penny all year long. Moreover, if the total contributions are more than is spent, then that money accumulates in the account. It can be saved and invested, and it can be withdrawn — albeit taxably, with a 10% penalty for those under 65. It is also inheritable, should the owner die. Intelligently managed, HSAs could become a sort of back-door pension.
As like-minded readers may be wondering, I’m not arguing against HSAs. These are some of their best features, and I think school districts ought to give them serious consideration. If teachers are free, however — and I believe they should be — to contribute as little as they like and to keep what remains from year to year, then that arbitrary contribution demanded of their employer raises an obvious question: why aren’t more of the savings being passed on to the town?
That brings us back to the reason that this information is nigh upon useless in judging the contract negotiations from the outside. Disregarding the possibility that the union sought to transfer the “savings” to some other part of the contract (such as higher salaries or other benefits), it could be that the school committee counter-proposed some sort of modification to the HSA formula — say, a decreasing employer contribution over time, as the accounts grow — or just refused to accept the healthcare proposal as balance to some other aspect of the contract.
Suggesting public outrage over the rebuff would then seem just one more posturing tactic.

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Pat Crowley
14 years ago

Ham handed? and I thought that it was artfully done….

Justin Katz
14 years ago

Oh please:

Because the school committee already collects $1,100 from teachers for a family plan and half that for a single plan, while it shouldn’t be factored into cost savings (because it doesn’t reduce the premium and the district doesn’t recoup the money all at once), the total absolute savings for the first year is more than $25,000.

Pat Crowley
14 years ago

So I was right… for the righties, it is not about saving the tax payers money, it is about punishing the teachers.
Glad we could clear that up Jus.

Justin Katz
14 years ago

No, Pat, you are not correct. (Although I apparently was, in thinking you more interested in ham-handed spin than discussion.)
The point of this post is that you’ve not provided enough information to know whom it is that’s blocking positive change (for both teachers and citizens). For all we on the outside know, the union may have offered this somewhat meager savings to take the sting out of some even more expensive proposal.

johnpaycheck
johnpaycheck
14 years ago

message to pat crowly.
there is way too much public info out there and very little symapathy for the poor teachers..
and there is no money without raising state and property taxes.
the more you strike, the more public info gets out and the more the taxpayers say to hell with the teachers.

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