A news service for the people of Michigan from the Mackinac Center for Public Policy

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School District Saves By Dumping Expensive Union Insurance Plan

Dansville district saved $250,000 after getting rid of MEA-affiliated MESSA plan

In 2011-12, Dansville Public Schools paid for all of its employees’ health insurance premiums and covered their deductibles and still paid $250,000 less than they had budgeted.

The district was able to do this because its employees switched from the top-tier MESSA insurance plan to a high deductible plan with copays, said Superintendent Amy Hodgson.

Districts are seeing savings by ditching the high-priced MESSA plan that as many as 80 percent of the school districts in Michigan carried at one time. MESSA is a third-party administrator affiliated with the Michigan Education Association that buys health insurance from Blue Cross Blue Shield of Michigan and resells it to school districts.

"Imagine how many more resources districts like these could have devoted to student learning had they made some of these common sense reforms years ago like most of the rest of the private sector did,” said Michael Van Beek, education policy director of the Mackinac Center for Public Policy.

The Dansville Education Association's contract expired at the end of June. Hodgson said Dansville was still in negotiations with its teachers union at the end of June on a new contract.

Once contracts expire, the state has mandated a "hard cap" on what a public employer can play in premiums for an employee’s health insurance. The cap is $5,500 for a single plan, $11,000 for two people and $15,000 for a family. Hodgson said Dansville is under the hard cap system.

The Kaiser Family Foundation 2011 survey of health insurance costs found that the average employer contribution in the U.S. for family coverage was $10,944, or 27 percent lower than the state cap for public schools. 

Some school districts have already reported similar savings to Dansville. For example, Ravenna Public Schools said that its costs for employees had dropped 17 percent since it switched from MESSA to a cheaper plan.

Alternatively, Dearborn Heights School District teachers went from paying nothing for their own health insurance premiums to paying between 32.5 and 37.5 percent toward the cost because they chose to pay more to keep MESSA. Other Dearborn Heights employees who switched to a less expensive plan paid 20 percent of their health care costs.

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See also:

MEA Ignores Reality In Complaints About Health Care Cost Increases

Teachers Choose Union Health Plan, Now Pay Up To 37.5 Percent of Premiums

High Costs Force School District to Drop Union-Connected Health Plan

MEA President Repeats 'Disingenuous' Claim About Teacher Pay

MEA's Underpaid Teacher Claims Don't Fit With The Facts

Are Teachers With Master's Degrees Forced To Take Food Stamps?

Michigan $1 Billion Closer to Bringing Benefits In Balance

Teachers Union Health Insurer Paying Big Raises

Michigan Ain't Wisconsin, But Their Teachers Unions Share a Playbook

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