School districts brace for Affordable Care Act’s effects

Local school districts are working to comply with the Affordable Care Act before they are hit with penalties in early 2015.

Delayed one year from this January, the employer mandate under the Affordable Care Act calls for organizations with 50 or more full-time employees to provide “affordable” health benefits to anyone working 30 or more hours each week.

If organizations, school districts included, fail to offer health insurance or “affordable” benefits to qualified employees, they will face hefty fines set by the government, thousands of dollars per employee.

“When the Affordable Care Act came out with this mandate, the initial reaction was, ‘OK, we’re doing that already for the most part,’” said Brandon Nelson, director of labor relations and benefits for Anoka-Hennepin District 11.

But “the penalties get your attention, so we’re just making sure,” he said.

The district is analyzing employee data over a 12-month look-back period to determine which employees currently work more than 30 hours and are not offered health insurance from the district.

As the largest school district in the state, Anoka-Hennepin has nearly 6,000 employees; 145 of them, about 2.5 percent, are full-time employees and are not offered health insurance from the district, according to Nelson.

Of those employees, Nelson estimates that the district will offer 75 of them insurance by 2015 and adjust assignments for the remaining 70 to ensure they are working less than 30 hours each week.

The 75 employees that will likely be offered insurance have more “permanent” positions, according to Nelson.

Final staffing decisions will be made by administrators and the school board in the coming year.

The district typically contributes $648 each month toward single health insurance plans and no more than $1,042 per month on family plans. If employee counts and insurance pricing stay constant, the district could incur anywhere from $583,200 to $937,800 in additional expenditures next year if all 75 employees elect to get insurance through the district.

Of the 70 employees whose hours may be cut, the largest groups affected might be substitute teachers and employees with multiple part-time jobs, according to Nelson. However, there really are no large subgroups.

Only three substitute teachers work more than 30 hours each week at this time; the district employs 400 substitutes.

Spring Lake Park District 16, like many school districts, contracts with an outside agency to hire substitutes, so “we won’t have an impact there,” according to Director of Human Resources and Organizational Development Ryan Stromberg.

Anoka-Hennepin has discussed using an outside agency to hire substitutes, but “I think it would be unlikely for the district to choose that path,” Nelson said. “We are confident that we can staff and meet our needs better by having [substitute teachers] be our employees ….”

Both districts contract bus drivers.

Under the Affordable Care Act, an employee that fills two positions – each less than 30 hours by itself, but 30 or more hours combined – in one organization is considered a full-time employee.

One option the district will consider is hiring two individuals instead of one to cover those jobs; previously there has not been any incentive to do so. The district could opt to maintain one person in both roles and provide them insurance, but “that’s an additional budgetary cost,” Nelson said.

The Affordable Care Act could affect coaches in District 16.

Many coaches, between 60 and 70 percent, have a dual role as teacher and coach. They are likely already offered insurance, but the remaining 30 to 40 percent will need to track hours to make sure they do not meet 30, according to Stromberg.

Currently, “they work as many hours as they need to get the job done,” Stromberg said.

Teachers won’t feel the effects of the Affordable Care Act as much as other employees might because almost all teachers in both districts are already insured and that will not change.

If teachers work about 16 hours each week, or four-tenths of a full-time equivalent position, they qualify for insurance in District 11, Nelson said.

Spring Lake Park is feeling the Affordable Care Act’s impact as health care costs rise.

The district paid an additional 2 percent for its overall health plan this year, approximately $100,000 with total costs between $5 and $6 million, according to Stromberg.

Insurance costs have gone up, but Julie Blaha, president of the Anoka Hennepin Education Minnesota union, attributes rising costs in District 11 primarily to usage.

The Affordable Care Act has not affected collective bargaining for the 2013-2015 teachers’ contract, according to Blaha.

But as the union and district continue to negotiate, “our goal right now is to make sure that we’re not guessing and that we’re not going to make any choices on partial information,” Blaha said, mentioning all of the questions and rumors about the legislation.

“For some people it’s creating solutions, for others, confusion,” Stromberg said.

Olivia Koester is at olivia.koester@ecm-inc.com

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