School Districts Start Abandoning Near-Free Health Insurance

A struggling economy, rising costs and concerns about fairness have prompted Indiana school districts to slowly begin abandoning a long-held policy of offering administrators health insurance for $1 or less a year.

Nearly 60 of Indiana's 354 public school districts now require administrators to pay more than $1 for their health insurance. That's a big shift from a decade ago, when most districts shouldered the insurance costs for their top staff, said Nelson Miller, a consultant with the Indiana School Boards Association.

School districts that have made the change say it has saved them millions at a time when state funding for schools has dropped. But others said low-cost health benefits are expected for key positionsThe Penn-Harris-Madison school district in Mishawaka has saved more than $5 million since changing its policy in 2005, spokeswoman Teresa Carroll told the Daily Journal of Franklin.

Administrators and teachers who once paid as little as $1 a year now pay as much as $2,631 for health insurance, and the district covers the rest, she said.

She said the district has spent the savings on teachers and operating costs.

Other districts that have changed policies include Center Grove, which in July began requiring new administrators to pay $1,200 per year for health insurance; Noblesville, where administrators began paying 20 percent of the cost this year; and Brown County, which has removed department chairmen at the high school, food service employees and maintenance employees from the list of those eligible for the $1 a year health plan.

Some districts that have kept the $1 policy say they're feeling financial strain as a result.

Brian Harmon, superintendent at the Barr-Reeve school district in Montgomery County, said the perk -- which includes teachers -- is becoming a bigger burden as health costs soar 12 percent to 15 percent a year.

"It's becoming more and more difficult all the time," he said. "When those contracts were agreed to, many years ago, health insurance wasn't as significant a cost as it is now."

He said the health benefit is a topic in each contract negotiation, but so far the district has been able to continue offering the benefit because it is self-insured, which reduces costs.

"We've been relatively lucky as a school corporation over the last several years," Harmon said.

Several of the state's largest districts say they expect to continue offering the $1 benefit.

Indianapolis Public Schools, Avon and Hamilton Southeastern Schools offer administrators health benefits for $1 a year or less, and they don't expect that amount to change.

Judith Bush, superintendent of the Attica school system, said her district has never considered making administrators pay more.

"It's fairly common, a very typical expectation of an administrative position," Bush said.

But Mike Reuter, chief financial officer for Hamilton Southeastern, acknowledged that concerns sometimes arise about the fairness of the benefit.

"I imagine it will come up again," he said.

The debate over health costs is lost on Mooresville, one of the few districts in which administrators have paid more than $1 for health insurance for years. District administrators pay the same rate as teachers, Assistant Superintendent Tom Johnson said.

He said the district has never considered having administrators pay $1 or less a year for the benefit.

"It's never been an option," Johnson said. "And I can guarantee, it's not something we're going to push for."