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Health, dental premiums to be waived in June for Harford school employees, retirees

Harford County Public Schools employees and retirees will get a "premium holiday" in June, meaning they do not have to pay for health and dental insurance for one month.

The payment waivers are the result of various reimbursements provided through insurers and unspent health care funds that have been returned to the school system.

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The Board of Education voted 8-0 Monday evening to transfer a combined $2.79 million to cover the premium holiday and contributions to the Maryland Association of Boards of Education's Other Post-Employment Benefits Trust Fund. Board member Rachel Gauthier was absent.

The Harford school system and nine other Maryland school systems contribute to the cooperative fund to cover the costs of future benefits for retirees, such as health and dental insurance, that are not part of the retirees' state pension payments.

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More than $1.8 million will go to the OPEB trust and $938,053 will be set aside for the premium holiday, out of that $2.79 million transfer, Eric Clark, the school system's budget director, told board members.

Following budget savings on health insurance several years ago, school leaders granted a similar premium holiday to make up for a lack of increases in employee compensation, Clark said.

HCPS health insurance is administered by CareFirst BlueCross BlueShield, dental insurance by Delta Dental. The school system covers 90 percent of premiums, and employees cover the remaining 10 percent, according to the school system's website.

Bi-weekly payroll deductions for full-time employees and monthly premiums for retirees vary based on the selected plan and whether an individual, spouse, child or entire family is covered.

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About 5,000 people work for Harford County Public Schools; 4,259 employees receive health coverage, and 4,349 have dental coverage, according to Jean Mantegna, assistant superintendent for human resources.

Several thousand HCPS retirees also get health and dental benefits – 3,265 get medical and 2,461 get dental coverage.

Employees and retirees can also include spouses and children in their coverage. The school system has budgeted more than $67.5 million for medical insurance for all subscribers in fiscal 2016 and more than $3.9 million for dental insurance, according to Mantegna.

Giving back to employees

Mantegna told school board members that health and dental insurance are "self-funded" by the school system, so a deposit that covers projected claims and administrative fees is provided to the insurers each year.

If expenses are less than what was projected, then the remainder is returned to the school system.

"Truthfully, a portion of that [refund] belongs to the employees because they have contributed in part of the premiums as well," Mantegna said. "The way to refund that back to them is by giving them a benefit holiday."

Clark noted employees have used their health insurance "more prudently" by incurring fewer claims in recent years.

"The board felt that since we were getting that refund, part of that should be returned to the employees because the savings was because of the employees using the health care in a prudent manner," he said.

Responding to a question from board President Nancy Reynolds, Clark estimated that HCPS' current liability for OPEB related costs will be about $660 million as of the end of the 2015-2016 fiscal year in June.

Only about 4 percent of the OPEB liability has been funded "just because we don't have a lot of funds to put toward it," Jay Staab, director of finance, said.

Board member Joseph Hau asked if school system retirees must enroll in the federal Medicare or Medicaid health care programs to alleviate some of the pressure on the OPEB trust.

Staab said "the liability is determined irrespective of [Medicare]."

Mantegna said all retirees must sign up for Medicare and can enroll in a Medicare supplemental program through HCPS when they turn 65, a program that is provided at a lower cost than traditional Medicare.

The school system contributes to the retired employees other post-employment benefits through a tiered system. The amount a retired employee pays in premiums depends on their years of service with HCPS, Mantegna said.

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