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Albion district sets aside $8 million for employees’ health insurance – in retirement

By Tom Rivers, Editor Posted 9 July 2014 at 12:00 am

ALBION – The school district continues to sock away money for one of its biggest financial liabilities – health insurance for retired employees.

Teachers and school workers often retire with many unused sick days. Those days can then be used to earn paid health insurance – long after people retire from the district. For every 25 days of unused sick days, employees can earn a year of health insurance coverage.

Albion says that cost is $12.3 million as a potential liability. That is up about $600,000 from a year ago.

The Board of Education wants to commit to having about two-thirds of that liability in the bank. The board on Monday voted to shift $821,000 in unexpended funds to an account for post retirement health costs.

“The $12.3 million is a large number, it’s a significant number,” Shawn Liddle, the district’s assistant superintendent for business, told the Board of Education on Monday.

Districts since about 2006 have had to list the potential expense as a liability on their books. Some districts have set aside little money for the cost, Liddle said.

Margy Brown, the board president, said Albion is fortunate to have been stashing away funds each year so the district isn’t hit with a huge expense with not enough in reserves.

Albion would like to limit its liability with the post retirement costs in the future through employee contracts. The district wants to cap the post retirement health benefits at a 10-year maximum. Liddle said some districts allow the benefit after 10 years of retirement.

The district also is trying to negotiate a higher employee cost share with health insurance. Right now, employees pay 15 percent towards the costs of their health insurance, the same rate followed by retirees who earn post-retirement health coverage.

The district would like to push that cost share even higher. It’s been an issue in employee contract negotiations. The union representing support staff – aides, building secretaries, physical therapists and registered nurses in the schools – is now two years without a contract.

The CSEA union for custodians and maintenance workers also had its contract expire on June 30.

“Health insurance is always an issue,” Liddle said. “How much does the employee pay?”