For the region's teachers, fully paid health insurance may soon be a benefit of the past.
As insurance costs increase, state funding decreases and fear of a tax that could be levied under the new federal health care law grows, school districts are asking teachers to share the burden.
The request could lead to long delays in signed union contracts. It could - and already has - caused strikes, strained relationships and years-long battles.
Teachers in five of Lackawanna County's 10 school districts - Abington Heights, Carbondale Area, Dunmore, North Pocono and Old Forge - are working under expired contracts. By the end of August, that number could grow to eight, as contracts in Lakeland, Mid Valley and Riverside are set to expire.
None of the teachers in those districts is required to contribute toward health care premiums - for now. While teachers may pay deductibles for doctor appointments or hospital stays and co-pays for prescriptions, nothing is paid toward premiums.
"It is certainly a major issue," said Tom Templeton, an assistant executive director for the Pennsylvania School Boards Association. "More districts are coming to the table with an eye toward burden sharing."
Unions, which consider the health insurance as part of a teacher's overall compensation, are willing to work toward cutting overall costs and are trying to be flexible, their representatives say.
District negotiators fear if unions do not make concessions now, an excise tax called for in the Patient Protection and Affordable Care Act, signed into law by President Barack Obama in 2010, could cost districts thousands starting in 2018. Contracts now being negotiated could go through 2016 or 2017.
"It's a crisis waiting to happen and it's a crisis you don't fix overnight," said John Audi, the negotiator for several area school districts.
Premium shares
Statewide, teachers in 168 of 500 districts are working without contracts. By next fall, that number could grow to 288 districts - more than half of the districts in the state, according to the PSBA.
While salary is still a major issue in negotiations, most contracts hinge on health care.
A PSBA survey of 422 districts statewide shows that 304 districts had teachers who paid a portion of their premiums in 2011-12. Some pay a set dollar amount, and others pay a percentage of total costs.
Scranton teachers are the only in Lackawanna County to pay for part of their premiums. In Scranton, premium payments range from $50 for singles to $80 for families per two-week pay period. Before a new contract was approved in 2008, teachers paid $8,100 a year for family coverage.
High costs of insurance, limited state and local funding and "equity" are driving the push for shared premiums, Mr. Templeton said.
In the eyes of many school board members, it only seems fair to ask teachers to pay a portion of their premiums, since people in the private sector already do, he said.
Along with asking for a premium share, some districts are decreasing benefits for spouses and children, he said.
Districts are also starting to determine how an excise tax could affect finances.
Excise tax
Under the Affordable Care Act, high-cost insurance plans, often referred to as "Cadillac plans," would be subject to a 40 percent tax starting in 2018 if they are above the government's threshold. The threshold for an individual plan is $10,200 and is $27,500 for a family plan. The tax would be on insurance companies, which would likely pass that onto consumers, and in this case, school districts.
Mr. Audi, a former attorney for the Pennsylvania State Education Association, the state's largest teachers' union, is now an attorney for area school districts. He estimates that current plans in nearly every school district in Northeast Pennsylvania would be over the threshold in 2018. The price each school district pays varies, but is about $7,000 to $8,000 for an individual and $19,000 to $24,000 for a family. Those costs are only expected to increase leading up to 2018.
"The parties need to adjust benefits," Mr. Audi said. "The districts can't pay anymore than we're paying."
Plans that would not reach the limit include higher deductible, preferred-provider organization plans. Most people in the private sector already have plans like that, he said.
Plans for the 2017-18 school year would be affected, and Mr. Audi is negotiating contracts now that would go until 2016.
"If we don't fix it by 2017, we won't be able to afford to pay benefits," said Mr. Audi, who is currently negotiating contracts on behalf of Abington Heights, Old Forge and the Northeastern Educational Intermediate Unit.
In Luzerne County, Mr. Audi is attempting to start "coordinated bargaining," in which school districts work together on similar concerns. He would like to start the same effort in Lackawanna County.
The 2018 excise tax is not the only reason for the need for immediate change, Mr. Audi said. The loss in state funding has been dramatic, and pension costs for districts are projected to skyrocket.
And beyond what could happen in 2018, teachers need to "have some skin in the game," he said. "You need to want to be able to keep the prices low."
District negotiations
Old Forge is one of 10 districts statewide with teachers working under an expired contract since 2010. A strike kept students out of class for two days in December.
The union has rejected the district's "final offer" that did not include retroactive pay and included premium shares of $17.18 per paycheck for single coverage and $42.49 for a family plan.
John Holland, regional field director for the PSEA and negotiator for the Old Forge teachers, said premium sharing should be called "cost shifting" instead.
To bring down the total cost of health care, teachers are willing to enroll in less expensive plans with higher deductibles and co-payments, he said.
"Those are the two things that will reduce insurance costs," he said. "All we're doing is continuing to pay the insurance industry money. That is to no one's benefit."
Mr. Holland said the union is also willing to look at other insurance options and try to save the district additional money. If teachers are getting an increase in salary, but also have to pay for insurance, there may not be an overall benefit to the teachers, he said.
"Health care is part of your compensation," he said.
He also criticized Mr. Audi for trying to negotiate benefits based on the 2018 excise tax.
"We only negotiate things that go until the contract expires," Mr. Holland said.
Fact-finding
During negotiations, unions or school districts can request that a fact-finding report be completed by the Pennsylvania Labor Relations Board. If accepted by both parties, the report becomes the basis for a contract.
A 2011 report from Old Forge called for no increase in premiums and was rejected by the school board.
More recent reports for North Pocono and Abington Heights called for premium shares, and the reports were rejected by the unions and accepted by the school districts.
The fact-finder for Abington Heights recommended a plan in which bargaining unit members contribute 1.25 percent of health care premiums in 2012-13 and 2.5 percent in 2013-14.
The report for North Pocono recommended teachers pay premiums beginning in the second year of the five-year contract. Health insurance costs ranged from $10 per pay period for a single teacher to $25 per pay period for those with a family. By the last year of the contract, the amount would be $17 per pay period for teachers on single plans and $45 for those on family plans.
Carbondale and Dunmore teachers also are working under expired contracts.
"I can't comment on negotiations, but everything is on the table," Dunmore Superintendent Richard McDonald said.
Searching for savings
Rosemary Boland, the president of the Scranton Federation of Teachers, and executive vice president of the American Federation of Teachers Pennsylvania, said her union members have learned to deal with paying a portion of their premiums. A contract negotiated in 2002 called for teachers to pay for any health insurance rate increases higher than 1998 rates. The language had teachers paying more than $8,000 for family insurance plans until a new contract was negotiated in 2008.
Many AFT locals have also agreed to pay portions of their premiums, she said.
"It's big issue, and a costly one, and we recognize it," Ms. Boland said.
The union worked with the district to reduce overall health care costs and encouraged the hiring of a health care consultant.
By negotiating with carriers and moving plans to different providers, the Scranton School District will save more than $2 million this year on health care, officials estimate.
Even if teachers do not pay a portion of their premiums, unions should be looking at ways to reduce costs.
"Everyone of us needs to monitor the numbers," Ms. Boland said.
Contact the writer: shofius@timesshamrock.com, @hofiushallTT on TwitterAt odds
In Lackawanna County, five districts involved in contract disputes.
-âAbington Heights
-âCarbondale Area
-âDunmore
-âNorth Pocono
-âOld Forge