Heed auditor's recommendation about consolidating school health plans

LEGISLATORS should heed the report released last month by state Auditor Brian Sonntag about health benefits for public school employees in Washington.

The performance report says the state could save up to $90 million a year — about enough to pay the salaries and benefits of 1,000 teachers — if these health benefits were managed differently.

"This is a report that is far-reaching and potentially affects every school district," Sonntag says.

The report was done at the Legislature's urging. Sonntag hired the Hay Group of Philadelphia to do it. It is a credible study and a good start.

Their report says the 100,000 employees in Washington's 295 school districts are covered by 200 plans administered by 10 different insurers. The plans are "quite generous," the report says, and are costly for the additional reason that there are so many of them.

It suggests that they be combined in a new statewide plan with one self-funded pool for employees and another for retirees, with three tiers of standard benefits. It says the $90 million in savings is possible if participation is mandatory, as in Oregon.

Such a reform implies uniform benefits or a menu of benefits. This would remove health benefits from bargaining by union locals, though they could be bargained by all the unions together, as is done with state employee benefits.

The report also said the current plans tend to unfairly favor employees who insure only themselves. The median single-coverage employee pays $27 a month, and many employees pay nothing, being subsidized by part-timers with no benefits. On the other hand, the median employee who insures a spouse and children pays $500 a month. The report says the gap should not be so wide.

It is too late in the session for legislators to untangle all these issues now. This report should be the beginning of bills that are offered in the session of 2012.