Baltimore City Schools CEO Gregory Thornton stands behind Mayor Stephanie Rawlings Blake during a press conference outside City Hall announcing that the Youth Works city-business partnership has 8,000 summer jobs for Baltimore City youth.
Baltimore City Schools CEO Gregory Thornton stands behind Mayor Stephanie Rawlings Blake during a press conference outside City Hall announcing that the Youth Works city-business partnership has 8,000 summer jobs for Baltimore City youth. (Amy Davis / Baltimore Sun)

More than 1,000 spouses and children of city schools employees were purged from the district's benefit rolls after an audit found they weren't eligible for health insurance plans.

The audit yielded $3.6 million in savings, according to schools CEO Gregory Thornton. In reviewing records of 5,336 city school employees, auditors found that 651 children and 392 adults no longer qualified for coverage as dependents.

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Thornton has embarked on a cost-saving quest over the past year after he discovered the school district faced a $72 million deficit this year.

The health care effort — as well as a similar audit of city employees conducted by the same company in 2013 — have sparked concerns that hundreds of people, especially children, are left without insurance. The city dropped about 2,000 people for a savings of $6.5 million.

City Councilwoman Mary Pat Clarke also questioned the timing of city schools dropping coverage after painful cost-cutting measures including dozens of layoffs and after the final budget was approved.

"There's no specific purpose or cure this is going to represent," said Clarke, who also criticized the city when it purged its health care rolls two years ago. "I wonder how much that money would have prevented those school-based layoffs."

Thornton said auditing to find "organizational efficiencies" represents "strong protocol." He said the audit frequently found that coverage was based on outdated information.

"What happens is that children age out, and there are changes in marital status, so it's just an ongoing best practice," he said.

The audit started in April and took about two months. About 10 percent of spouses and 9 percent of children did not meet qualifications for health care coverage.

City schools officials did not respond to questions about whether employees would be required to pay back the school system.

Thornton said the savings exceeded his expectations by more than $1 million. He said he would set aside at least $1.5 million to "drive more dollars into the classroom." He said the savings could allow him to hire as many as 40 teachers, which would help shrink class sizes.

Thornton said he closed much of the deficit by taking similar housekeeping measures, such as cutting several hundred surplus positions on the system's books — those full-time employees were paid but didn't have permanent jobs. He also eliminated the practice of double-paying for transfer students.

In addition, Thornton closed the deficit by laying off more than 100 people at the central office and in schools.

During the city's purge, critics said that some workers were unfairly denied health insurance and others never received notification that they needed to fill out the paperwork.

Like city employees, school employees were given the opportunity to turn in paperwork proving the eligibility of dependents and to appeal. City schools officials said employees received several letters and emails notifying them of the process and that appeals are underway.

The district's union leaders supported the audit and reported few problems.

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Administrators union president Jimmy Gittings called it a "strategic move" and said he heard from only one union member who needed more time to file paperwork.

"I feel it was the right decision," Gittings said. "Individuals who were receiving coverage who were not eligible were a lot of the cause for the deficit."

Marietta English, president of the Baltimore Teachers Union, also endorsed the move.

"With these efforts, I believe the district will save money and continue to provide high-quality benefits to employees," English said.

More changes to the district's health care benefits may be on the way. Thornton has said health care packages need a "complete reorganization," and he hopes to renegotiate benefits with the unions. The school system pays about $242 million a year for benefits, including health insurance.

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