LPSB retirees granted temporary insurance relief

The Lafourche Parish School Board, one month after implementing new contribution rates for its insurance plan beneficiaries, will vote tonight to cut in half a 10 percent hike it had approved for retiree contributions.

The measure is backed by Superintendent Jo Ann Matthews and received unanimous approval from the insurance committee. It is expected to pass, and if so, the board will authorize using its reserve fund to offset the 5 percent drawback.

The drawback was attributed to the unsettled insurance landscape the board is navigating. Last month’s rate increases were changed because the school board is unsure of the impact when it eventually implements state-mandated eligibility requirements parallel to the currently state-run Office of Group Benefits.

“… we are offsetting the additional 2012 plan year 5 percent contribution from retirees by charging that amount to the LPSB Insurance Reserve Fund, with the requisite that all retirees must recognize and realize that chances will be coming in the next year with regard to contribution level percentages and plan eligibility requirements based on the OGB State eligibility rules,” the official motion reads.

The LPSB insurance program is self-funded and administered by Blue Cross Blue Shield of Louisiana.

Matthews said the board would study the new requirements and make alterations in its policy and procedures to best adjust. Formal changes could be months away, but could be implemented as late as the 2013 fiscal year.

LPSB’s staff attorney said OGB, to his knowledge, does not prevent any eligibility. A one-year employee of the school board can retire and become a beneficiary of the board’s plan, he said.

Pat Amedee, the attorney, added that the school board has little choice but to enter the “new arena” and comply with OGB eligibility requirements. He said the change could “bolster” the school board’s account, but it could also be “bombarded” with the impact of one-year retirees.

“All of what you’re doing today is obviously very important,” Amedee said. “I’m going to suggest to you that all of this may change very, very rapidly as your eligibility criteria changes and you adopt the Blue Cross plan document and move in harmony with the Office of Group Benefits.”

The superintendent set a wide range for potential cost fluctuation. “It’s important for people to understand that costs might decrease, but costs might double or triple. We have no idea.”

LPSB Business Manager Don Gaudet said about $30,000 would be charged to the reserve fund to offset the 5-percent contribution decline among retirees. The reserve fund has about $7 million on hand.

The premium hikes were implemented to create an additional $370,000 in revenue, which is needed to offset a projected shortfall of $900,000 for the board’s 2012 total contribution, or all of the money paid into the system, according to brokers with Gallagher Benefit Services Inc., who handles the board’s health insurance plan.

Actives’ contribution rates, which were increased by 5 percent last month, will not be modified. “We’ve set those rates, and they’re there to stay for this current year,” Matthews said.

Retirees contacted school board members to voice displeasure about the original increases. One board member said she received more emails on the topic than she ever had before. Another said she felt threatened by one email in particular and said public servants do not deserve vile treatment.

“I feel I’m doing what’s best for this board to stay alive for the insurance program to be successful,” board member Julie Breaux said.

An alternative suggested by the retirees was to require all beneficiaries to pay identical increases, with 6.25 percent hikes being discussed, one board member said. Behind-the-scene party lines were drawn, with actives opposing the idea that they should shoulder an additional burden.

Yet, the drawback is not a result of the reaction, Matthews said. The initial rate changes had to be done a month ago in order for actives to enroll in the plan by the deadline, she said, and she also pointed out that the committee reserved the right to change the increases, a note that was included in the minutes from the committee’s last meeting.