Health care questions loom for schools as budget deadline nears
Affordable Care Act creating challenges for Iowa districts
Individual taxpayers are not the only ones bracing for April 15.
That’s also the deadline for Iowa school board members to certify their districts’ final fiscal 2014 budgets.
This year, administrators are contending with a plethora of unknowns: the impact of federal sequestration, the level of funding from the state and the price of complying with federal requirements.
One of these unfunded mandates — laws not accompanied with adequate funding for implementation — is the Affordable Care Act.
During a March 11 school board meeting, Dave Benson, superintendent of the Cedar Rapids Community School District, deemed the health care law — colloquially known as “Obamacare” — the biggest unfunded mandate.
One part of the act, which President Barack Obama signed into law in March 2010, carries a financial penalty for businesses with more than 50 full-time employees that fail to offer sufficient health coverage beginning Jan. 1, 2014.
That requirement extends to educators. Staff salaries and benefits are historically the largest portion of expenditures for many Iowa school districts, including Cedar Rapids, and complying with the Affordable Care Act could deepen that pool.
Yet, with less than a year until that part of the law goes into effect and only weeks until board members certify budgets, much of the financial impact of extending adequate health care coverage to employees working at least 30 hours a week is unknown.
“I think everyone’s pretty much in the dark on it. I don’t think the school administrators have received a lot of information,” said Randy Richardson, associate executive director for field services for the Iowa State Education Association. “I know the schools are getting information from third-party administrators of the insurance companies. Just because the insurance company or the third-party administrators says that doesn’t mean it’s the final word. They obviously see it in a different way than school districts would.”
Jill Cirivello, executive director of human resources for the Cedar Rapids district, declined to be interviewed for this story because so much is still uncertain.
“I am not comfortable answering questions on the subject at this point,” she wrote in an email to The Gazette. “There are too many unanswered questions remaining.”
For starters, what amounts to 30 hours per week? The bulk of Iowa’s 348 school districts begin school in August and end classes in May, leaving three months in the summer when many staff members aren’t on the clock.
In addition to representing teachers, the Iowa State Education Association also includes paraprofessionals and other school employees as members.
According to Richardson, it’s support staff who will be most affected by the new definition of full-time.
“Here’s the problem: The formula that they use to calculate the full time, whether you’re 30 hours or not, I don’t know if it’s widely understood,” Richardson said.
According to the U.S. Department of Labor, businesses can use three- or six-month evaluation periods to determine whether an employee qualifies as full-time under the law. The idea is that the time frame will be representative of their annual average workload.
Administrators in the Iowa City Community School District already have begun conversations about how to determine who is eligible for coverage.
Currently, the district already offers insurance to employees who are contracted at 30 hours a week.
“It takes a series of measurement periods and analysis periods for the employees. We haven’t completed those periods of time yet ... We’re taking those steps to make those measurements so we can determine what that impact will be,” said Leslie Finger, director of budget and finance for the district.
Finger cited examples of employees who are contracted in one position, perhaps as classroom aides, but then also work in a separate capacity which is funded by a grant with hours varying from week to week; sometimes logging enough work time to be full-time and other weeks not.
Cuts and costs
A concern given much airtime in the private sector, particularly in the run-up to the 2012 presidential election, was that business owners would cut employees’ hours in order to avoid the costs of providing health insurance or the fine for failing to comply with the Affordable Care Act.
Richardson said that fear has been echoed by association members, but most of the concerns have been about the fee structure.
“It would be relatively small,” he said. “People from less than 20 school districts have contacted us about it.”
The association has advised members to tell their administrators to hold off and wait until all the details are in before they begin talk of layoffs or reduced hours. The lack of information has prevented the association, which does not take an official stance on the Affordable Care Act or other national issues, from providing further guidance.
Though Finger said any potential changes related to the act will not impact next year’s health insurance premiums for current district employees, the Iowa City district does not yet have conclusive information on how implementing the act will impact current staffing or the budget.
Rolling back employees’ hours has been mentioned.“That would always be an option for an organization. We have included that in the discussion, but there has been no action taken to consider that at this point in time. I mean, quite frankly, it would be very difficult in a school,” Finger said. “It may not work out very well and disadvantage students and staff. That’s kind of where the discussion has been with schools, not just Iowa City.”