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Are health care changes fair to teachers compared to central office workers?

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    Photo: Harvey Finkle

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Updated | 10/25

 If and when proposed changes to teachers' health benefits take effect, most non-unionized central office employees will have access to a better health care plan without having to "buy up" to it, while all teachers' union members will have to start paying significantly more for the same coverage.  

Members of the Philadelphia Federation of Teachers have complained about being shifted into a plan that has higher out-of-pocket costs, although they have expressed a willingness to start contributing something toward their benefits.  

As the acrimonious fight between the SRC and the PFT plays out in court and both sides vie for the moral high ground in the realm of public opinion, there are many ways to parse what is fair and reasonable.

District leaders are saying that all must "share the sacrifice;" union leaders say teachers have sacrificed enough already.

"Non-represented" staff who work in the central office deserve to keep their benefits plan because they have sacrificed more in lost compensation already, District leaders counter.

Until now, teachers have had access to Blue Cross's Personal Choice 20/30/70 plan with a contribution of no more than 5 percent toward the premium; the District wants to shift all PFT members into a plan with more modest coverage than the existing offerings or make them pay significantly more to upgrade to the more generous 20/30/70 plan.

The plan that the District wants to make standard -- Modified Personal Choice 320 -- covers the same services, but out-of-pocket costs are higher. Shifting PFT members into this plan saves the District more than $11 million annually. Additional, greater savings result from requiring teachers to pay as much as 13 percent toward the premium cost of the new plan.

Personal Choice 20/30/70 is better in that it has only nominal out-of-pocket costs, like deductibles and copays. But if health benefits changes take effect, staying in this plan would cost some PFT members thousands of dollars per year, according to one analysis.

Most of the 436 central office workers were allowed to sign up for Personal Choice 20/30/70 without having to pay a larger share of the premium. (Superintendent William Hite and the 10 members of his cabinet, plus anyone hired after July 1, do have to 'buy up" to the better plan.)

District officials say the disparate benefits packages are a fair tradeoff because, starting in 2012, most of the central office workers started paying toward their health care costs, took a 3.75 percent salary cut, and were required to take three furlough days in 2012.

Teachers, they say, by contrast, got a 3 percent salary increase in 2012 and no reductions since (although some did not get expected raises for additional experience and degrees earned). They also haven't been paying anything into their health care. 

By those calculations, the average central office worker had an annual compensation of $79,430 in 2012, and now has an annual compensation of $74,743, a $4,686 drop. The cumulative loss over the three years is nearly $11,000.

During the same period, according to the District's analysis, the average teacher's compensation has gone up, from $70,000 to $73,061, thanks to a raise and step increase in 2012. That's a cumulative gain for teachers over three years of nearly $12,000, even after required payments to the standard health plan kick in. The District's analysis is for an employee with a spouse on the health plan.

Next year, however, when the changes are in force for a full year instead of just part of a year (assuming they start on Dec. 15), the annual average teacher compensation after benefits costs will fall to $71,439.  

That is still an increase compared to 2012, said District spokesman Fernando Gallard. That justifies putting a premium on the better plan for teachers, even though most central office employees are still in this 20/30/70 plan at nominal cost.

But going forward, teachers who choose to buy up to the 20/30/70 plan will be paying anywhere between $1,710 (for a single person) and $5,131 more annually (for a family) than the central office workers for the same coverage.

Plus, the PFT members will have a higher spousal surcharge -- for a spouse who has access to another plan through his or her employment, but chooses the District plan. The difference is $40 per two-week pay period for non-represented employees and $70 for a teacher. Now, spouses with other health care options can choose the PFT plan for free.

"One key point here is that you have to look at contributions the non-represented employees have already made," said Gallard, who is one of those employees.

"This whole conversation is about people making significant contributions toward savings for the District. The non-reps started to make contributions in 2012. You can't take that off the table."

Note: The initial version of this story incorrectly stated that until now, PFT members had access to the Personal Choice 20/30/70 plan at no cost. In fact, some teachers have had to contribute toward those premiums -- as much as 5 percent.

 

 

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Dale Mezzacappa

@dalemezz
Dale is a contributing editor at the Notebook. She has reported on education since 1986, most of that time with The Philadelphia Inquirer.