In 2005 the Sioux City Schools agreed with the teachers association on health care benefits. We asked the school administrators about cost sharing:

Questions:

Please detail what other costs were “passed on” to the employees of the district and what plan is in place to limit future cost increases to the taxpayers for employee benefits?

Please describe what plan, if any, is in place to transition employee benefits from a 100% taxpayer funded plan to a plan partially funded by the employees.

ANSWERS:

Years ago the District adopted a “defined contribution” approach to employee benefits.  Almost all bargaining groups (and the biggest share of total employees) are given “cafeteria dollars” to buy District medical insurance, dental insurance, life insurance, etc.  Any improvement to the “cafeteria dollar” allocation is factored into the bargaining group settlement.  In other words a 4% annual teacher contract settlement is split between salary dollars and cafeteria dollars.  If cafeteria dollars exceed the cost of benefit premiums, there is a “cash benefit” paid.  If cafeteria dollars are less than benefit premiums, there is a deduction from employee pay.  Generally, an employee requesting single coverage gets a “cash benefit”, and an employee requesting family coverage incurs a pay deduction for a portion of the premium cost.  An example of cost sharing changes for our most popular Plan B Medical is as follows: