Pattye Benson

Community Matters

Affordable Care Act discussion at TE Special Board Meeting — More questions than answers!

Last night’s special school board meeting included discussion of the Affordable Care Act and how the federal mandate would affect the District and its employees. The District’s ACA experts were Rhonda Grubbs, Wisler Pearlstine attorney (who works in the office of Ken Roos, school district solicitor) and Art McDonnell, business manager for the District.

Several aspects of the ACA presentation and discussion troubled me. Although the agenda stated that Grubbs would make the presentation, it appeared that McDonnell was in charge of the discussion and for the most part, served as respondent to Board and resident questions with Grubbs there as back up. McDonnell went through his prepared slides on the ACA, which included the various options available to the District. One slide, labeled ‘Health Benefits’ provided the cost of offering health care to all employees working 30 hr./wk. or 130 hr./month not already covered. According to this slide, the cost to provide benefits would be $881K for single employees and $2.2M for family coverage. However, there is no indication as to how ‘many’ employees this dollar amount references. Many of us in the audience were wondering where McDonnell got these dollar amounts from – what is the exact number of additional employees the District is required to cover under the ACA. Why weren’t the number of employees indicated on the slide? Pete Motel asked McDonnell that specific question – with a bit of hesitation, McDonnell responds that the number of additional full-time employees that the District needs to cover is 106.

It then becomes clear why the number of employees does not appear on McDonnell’s slide — because the next question is what happened to the jobs of the rest of the full-time employees. If you recall last spring, I think there were about 178 District aides, paras and substitute teachers that were not covered by District health benefits. We know that about 40% of the aides and paras did not return for the 2013/14 school year but it is unclear how those positions were filled. It is believed that many of these positions were outsourced but there has never been any public statement to that affect.

The next logical question to McDonnell came from Scott Dorsey – and that question was what happened to the rest of these jobs. Dorsey wanted to know many aides and para positions are currently outsourced in the District. McDonnell states that he does not know and asks Sue Tiede, the District’s personal director to answer Dorsey’s question. Tiede says that she doesn’t know the answer either. How is it possible that two of the highest paid administrators in the TE School District are unable to answer this simple question?

Subsequently and to their credit, both Pete Motel and Doug Carlson tried to achieve an answer to the outsourcing question. Again stonewalling by McDonnell and Tiede – claiming they do not know how many positions have been outsourced. With combined salaries of nearly $350K/yr, it is impossible to believe that neither McDonnell or Tiede know how many jobs are outsourced in the TE School District. McDonnell manages the check register for the District – he knows how much money is paid to Delta T and Quest. Tiede manages the District’s personnel – she knows who is hired and/or outsourced.

This is clearly not a case of McDonnell and Tiede ‘not knowing’ the answer to the outsourcing question but instead their choosing not to answer the direct question of school board members. According to Buraks, the ACA will next be discussed at the Finance Committee meeting on Monday, January 13. The question for Art McDonnell and Sue Tiede is how many District jobs are outsourced to Delta T and how many District jobs are outsourced to Crest.

Following the ACA presentation and Board member questions to McDonnell and Grubbs, there was an opportunity for the residents to offer their comments and/or questions as stated in the agenda. However, what the agenda did not say, was that residents were not allowed to ask their questions directly to the ACA presenters. All residents questions must be directed to the school board president who ‘interprets’ the resident’s question and then re-asks it to Ms. Grubb. But wait, it gets worse as one District resident, Joanne Sonn, discovered.

Sonn has done her homework on the Affordable Care Act, understands it better than most of us and previously offered her findings to the Board last year. She has spoken to expert ACA consultants and they agree, (with the information currently available) that the District can be in ACA compliance by offering a ‘skinny plan’ to the aides and paras. At last night’s meeting, some of the information provided in the presentation did not agree with Sonn’s interpretation of the Affordable Care Act so during the resident comment/question period she questioned McDonnell and asked for legal clarification from Grubbs. In the midst of her questions, the District solicitor Ken Roos rudely interrupted Sonn and told her that residents are not allowed to ask Grubbs questions!

Sonn was asking the Affordable Care Act ‘expert’ for legal clarification. She was then required to re-state her questions directly to Buraks. But rather than asking Grubbs to respond to Sonn’s ACA questions, Buraks says that all residents must ask their questions before any will be answered! To be clear, it doesn’t matter if there are three people or 10 people in line at the microphone – residents at school board meetings must ask all their questions before anyone can receive an answer. I guess this delay gives the Board president time to decide which questions will be answered. This policy makes no sense and is extremely unsatisfactory. At Board of Supervisors meetings, when a resident asks a question, they receive an answer immediately – why don’t the school board meetings operate the same way.

How were the residents to know that they are not permitted to ask questions of the person making the public presentation – there was no indication in the agenda nor direction from the school board. I found Ken Roos outburst to a resident unnecessary and disrespectful. There’s much talk about civility at these meetings; shouldn’t that civility policy extend to the District solicitor. Although it is understood that Ken Roos does not work for the residents, our taxpayer dollars pay his legal fees.

The special meeting to discuss the Affordable Care Act was eye opening, to say the least. It wasn’t so much what Rhonda Grubbs and Art McDonnell said — it was more what they didn’t say (or chose not to say). It was obvious that Grubbs and McDonnell are working together with a shared goal. And unless the Board and the community offers push-back, I think the endgame is to see how many reasons they can come up with not to offer insurance to the District’s aides, paras and substitute teachers. Grubbs herself volunteered that she and McDonnell would be working together on the ACA issue. So much for unbiased third-party input and since when did the District’s business manager become an expert on the Affordable Care Act? Again, I ask – why doesn’t the District bring in insurance consultants/experts from the outside?

A special thanks to school board members Pete Motel, Doug Carlson and Scott Dorsey – they were asking the questions that the public wanted answered.

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  1. This whole thing has become a joke. A very, very sad joke. At first I thought that to avoid the ACA mandate next year they would just cut the hours of those of us that are left to 27.5 if we were over 30. As some of us left over time, which is normal in any business, the positions would be replaced with an outsourced resource. Of course any new needs would be filled by an outsourced resource as well. I’ve already seen this in my school. In a couple of years you would have a base that is mixed, old TESD employees and outsourced employees. Well I no longer believe this because everyone is avoiding the underlying issue as to why they will ultimately outsource…..PSERS. You can offer a “skinny plan”, you can raise salaries to make up dollars lost to less hours, however, PSERS will always be there if the employee’s paycheck is cut by TESD. Less employees on the payroll equals less PSERS contributions for the district. Don’t say, “well the PSERS contributions by the district for this group of employees is so small, especially compared to teachers, custodians, clerical etc.”. Don’t forget, the water dispensers in the staff lounges were a “small” line item that was cut from the budget a few years back to save a few bucks. At this point, those that are left are “a few bucks saved”, like I said, just like the staff lounge water dispensers. Sad.

  2. What is the PSERS percentage this year? I believe it is in the range of 25%…catch-up funding for an unfunded pension plan in the state. Not sustainable. ?? Are you suggesting that is not worth discussing?

    1. Right Sidelines…21.4% this year rising to 28.84% next and 29.27% the year after. It was noted as THE significant savings when TENIG and the concept of outsourcing was discussed. Remember, the District has allocated over $20 MM over time to it’s Fund Balance designated for PSERS Stabilization but never tapped this account for that purpose. The only utilization of this Fund was a $10.386 MM transfer to a new Capital Fund. Not advocating anything here but I always thought if you put monies away for a purpose…you would consider using it for that purpose.

  3. In terms of being able to offer the paras and aides a lesser health plan then the administrators (highly compensated employees) it comes down to this. For the past several years the district has been able to pass the non discriminatory regulations of IRC105h by putting the paras and aides in a separate defined employee group which allowed them to offer the aides and paras NOTHING and still pass the non discriminatory test. Now the ACA says that all employees above 30 hours have to be offered health insurance. IRC 105h did not change and is not effected by the ACA. Lawyers we consulted say that if we passed the test before by having the workers in a separate defined group and offered them nothing, the group still is defined as separate and does not have to compare with the administrators (HCE) and we can offer them a lesser plan. The school board’s consultants feel there is a risk now in not passing the test by offering them a lesser plan (penalty for not passing is an employee tax on the highly compensated employees benefits who are not in the union)

    1. The HCE test is easy to pass. Make the lesser healthcare plan standard for all non-union employees (admins, paras and aides) with the option to buy up to a premium plan. Then increase the administrators’ salaries by the amount needed to buy-up to the premium plan. The aides and para can work 30+ hours per week and have a “skinny” healthcare plan. The admins buy up to the premium plan and see no change in their overall compensation.

    1. Waters was at the 2-hr meeting but said nothing. With Tiede and McDonnell unable to answer Board member questions about outsourcing, it would have been helpful if Waters had jumped in — assuming that he knows how many District jobs have been outsourced.

  4. Pattye, I am appalled at the way this went down, according to your notes above. THis is very fishy. And Buraks being complicit in this folly? Who do we as citizens have to protect us from our elected official(s) Buraks in this case, and from the arrogance of Tiede, Macdonnell et. al?
    They should be fired on the spot for not knowing the info asked of them. Of course, who will hold their feet to the fire? Is this some rubber stamp tin pot dictatorship>?
    Im disgusted.

  5. Ms. Grubbs said that if the employees were part of a collective bargaining unit, then there would be no problem. Did anyone understand if that was just in reference to the IRS non-discrimination rules, or if that means there would be no ACA issue as well?

    1. Roberta, I assumed Ms. Grubbs remark meant that if the aides/paras/subs were currently in a union, they would already have health coverage and therefore there would be no ACA compliance issue.

    2. To understand the IRS non-discrimination rules we need to realize that many benefits, including health care, are tax deductible. Non-discrimination rules are enforced by the IRS to prevent highly-compensated employees from using fringe benefits (pension plans, health care) as tax-shelters. HCEs can have a heath care plan much, much better than the average employee. It’s just that the company pays a penalty and the employee pays additional taxes.
      Unionized employees are excluded from the non-discrimination rules. As part of the bargaining process, the union had a chance to bargain for their health care. The union may have bargained for a health care plan better than the highly compensated individuals’ plan or they may have chosen no health care, but a much higher salary. The union was offered a choice.
      Non-unionized employees do not have bargaining power and are “protected” by the non-discrimination laws.
      There are exceptions to the non-discrimination rules for grandfathered plans which are complex.
      As an aside – enjoy the “beauty” of big government at work. People to write the non-discrimination rules, lawyers trying to interpret the rules, citizens trying to understand the rules, HR people trying fill the paper work out to comply with the rules and IRS employees trying to enforce the rules. Oh, and the rules were delayed for a year and still haven’t yet been finalized.

  6. Keith,

    Thanks, as always, for the knowledge background. So, Joanne is saying that the ACA in-and-of-itself does not change the non-discrimination test for the District. I don’t want to speak for her but I have read her opinion letter and have spoken to her about it. You seem to indicate that the concept of a HC plan for the lower paid segment of the workforce is possible under the “discriminatory” rules:

    “The HCE test is easy to pass. Make the lesser healthcare plan standard for all non-union employees (admins, paras and aides) with the option to buy up to a premium plan. Then increase the administrators’ salaries by the amount needed to buy-up to the premium plan. The aides and para can work 30+ hours per week and have a “skinny” healthcare plan. The admins buy up to the premium plan and see no change in their overall compensation.”

    I’m pretty sure I understand the concept you laid out but I’m trying to get my head around the economics. When you say, “Then increase the administrators’ salaries by the amount needed to buy-up to the premium plan”..I get a tad lost. The administrators already have the premium plan…no? Or, are you saying increase the compensation levels of this affected group up to the level that they could buy into the premium plan? This would/could be a significant cost to the District beyond the cost of providing a basic/skinny plan. I still go back to my discussions with the paras/aides who told us that, in a large majority, their insurance needs a have already been filled outside of the workplace.

  7. Let me see if I can clarify the situation.
    To pass the discrimination test, all non-unionized employees are offered the same two healthcare plans:
    1.High Deductible Plan
    The cost is $4,000 for single coverage and the district covers this in full. The employee has the option to buy family coverage at his or her own expense.
    2. A PC10/20/70 Plan
    This is the same plan that the HCEs have now costing $6,000 for singe coverage. The district contributes $4,000. (same as above) The employee covers the difference ($2K) and has the option to buy family coverage at his/her own expense (possibly another $10K).
    These two plans satisfy discrimination testing; the same plans with the same reimbursement are offered to everyone. The downside is that the current administrators are paying more (about $2K to $12K depending on their family situation) for healthcare than they are now. The solution – increase their salary ($2K to $12K plus a 25% premium for taxes) to cover the difference.
    The additional cost to the district is $4K times the number of aides and paras that elect coverage (30 x $4K = $120K) plus the 25% premium for taxes for the 20 or so administrators. (20 x $2K = $40K).
    From the web:
    The cleanest way to avoid running afoul of these non-discrimination rules is to provide any potentially-discriminatory benefits on an after-tax basis. For example, in lieu of providing enhanced benefits under the company’s group health plan, an employer could issue a bonus to a highly compensated employee that he may use toward his health care premiums or to purchase additional benefits. If your company already provides potentially discriminatory benefits, we recommend clearly reserving the right to stop providing these benefits on a tax-favored basis.

  8. Right…thanks. That’s one of the points from last year’s discussions. “We CAN’T offer discriminatory plans” was never backed by a cost analysis. Indeed you COULD offer this effected group a lesser plan BUT there would be a financial cost. Excellent, I’ll read the above attached reference.

    My next thought is would it make a difference if any new plan were majority employee contribution funded? Again, the paras/aides in large majority say they don’t want a HC plan…now, if it was employer provided…that would change. You can consider this rhetorical as you’ve helped so much already.

  9. Not to beat a dead horse, but does Keith’s statement mean that if the paras and aides were to unionize they could be excluded from non-discrimination testing?

  10. With everything so “up in the air” I see the failure of this board to act as being “prudent” in protecting the district from future legislation. That being said, I don’t agree with it, but I’m not sure any of them has the courage of convictions to move forward. And I don’t trust the law enough to know that there wouldn’t be a settlement somewhere down the road awarded back pay for benefit differentials.
    It’s a bit like special ed rulings. I am aware of a situation where a family sued a district for failing to recognize a child needing help — BEFORE THE FAMILY SOUGHT IT. And the award to the family included payment for services going back to when the family claimed the district should have been aware.

    SO — having sat through litigation reviews like that, I don’t know if the board should move forward as no one is willing or able to certify anything. And living in the suburbs of Philadelphia does mean that litigation is a way of life.

    Here’s the deal. Instead of cutting people, this board should look into a unilateral reduction of benefits and then make them available to everyone. Collective bargaining protects groups from anything they don’t agree to — but perhaps recognizing DEFINED CONTRIBUTIONS instead of DEFINED BENEFITS would finally have all employee groups recognizing health care for what it is — COMPENSATION.

    1. “Here’s the deal. Instead of cutting people, this board should look into a unilateral reduction of benefits and then make them available to everyone. ”

      IMHO, this says it all. This would end all the moaning and all the bickering. Everyone would be happy and there would be very little pain felt by all.

      This is going to be my mantra from now on. Anyone care to join me?

  11. Collective bargaining groups would be delt with separately from the non union workers in terms of non discrimination.regulations.

  12. The article that Keith references is refering to fully insured plans and the fact that the aca has not been clear on how it will implement and enforce non discriminatory regulations. TE is self insured and non discriminatory regulations and penalties are settled law under 105h. IRC105h has been on the books since the early 80s. There is no need for the aca to address non discriminatory regs for self insured plans because it is already covered. The ACA is now attempting to get fully insured plans regulated like the self insured plans. It is those plans that have some companies etc scrambling. Since TE already passed non discriminatory regs under 105h for the last several years by offering the paras nothing it stands that they should pass it now by offering a lesser plan. The district has already successfully classified the paras and aides as a separate employee group. Nothng the aca does changes that.

  13. Joanne,

    There are two ways that TESD can be in compliance with 105h
    1. Classification “such employees as qualify under a classification set up by the employer and found by the Secretary not to be discriminatory in favor of highly compensated individuals”
    2. Exclusion certain employees may be excluded from consideration— part-time or seasonal employees
    It would seem to me that classifying the paras and aides as a separate group is questionable. Following that logic, any employer could define a classification for any group and discriminate. It defeats the whole purpose of non-discrimination.
    Maybe TE was able to comply with 105h by classifying paras and aides as ” part-time or seasonal employees”.

  14. I’ve been away and perhaps that’s a good thing because, as reported, the process for incorporating community input at the Board meeting would have driven me crazy. Here’s hoping that Rev Dorsey’s Public Info Committee can come up with something that allows respectful and efficient dialog.

    Elsewhere, Neal has raised the question: what’s the objective here? Well, presumably we’re starting with an overall goal to provide the best possible education to all our children, given their individual circumstances and the financial and regulatory constraints we face. Up until now we’ve chosen a mix of teachers (and substitutes), para-professionals and aides, full- and part-time, with certain compensation packages.

    Now the rules are changing. I see the rules being laid out in the materials for last Monday, but I don’t see the Board being presented with viable, fully researched solutions. What are the net pros and cons (educational, financial, ethical) of all the options?

    Questions to address along the way:
    – Are there smarter ways to organize the work?
    – What are the ways in which TESD can offer compliant healthcare, and what would they cost under realistic assumptions for participation, premiums, etc.?
    – What mix of compensation do the employees want? Quantitatively assessed, and considering the constraints provided by limited revenue sources.
    – What part indeed does PSERS play, as noted by the first commenter here? In a high turnover position it may make little sense for an employer to be paying into the system for decades at “catch up” rates when the employee will not be around long enough to vest.

    There is so much good information surfacing here on CM that I hope the District is paying attention.

  15. Perhaps one of the reasons some aides stuck around this year is precisely to vest. One of the perks to retain employees?

    1. Thanks Keith for this UCFSD information — here’s hoping that the TE School Board see the link. The monthly UCFSD personnel report lists all employees by category and indicates 658.6 employees. The report states that there are 197 ‘supplementals’ of 197 — what does that mean? Contracted UFCSD services includes 2 for security and 16 labeled ‘PCA’. What is PCA — is that custodial services? Based on UCFSD reporting personnel reporting structure, it appears that your District has been offering these comprehensive personnel reports for some time, correct? Also, liked that the report includes staffing vacancies — more information that could be very useful for the public, particularly if someone was looking for a specific job. Scott Dorsey, is heading up the new reconstituted Public Information Committee for TESD — perhaps the committee could look at a similar monthly personnel report. If this information had been available at Monday’s school board meeting, it would have helped greatly with the confusion and unanswered questions from the staff. Thanks for providing this information.

      1. Supplementals are the contracts for extra-curricular activities. Typically, these positions are filled by teachers – e.g. football coach, department lead, newspaper adviser.
        PCA stand for personal care assistant. Typically, these are people with special skills assigned to special needs children.
        These reports are fairly new and were instituted about 4 years ago.
        As for public comment – I have been on a Board where public comment was limited to 3 minutes and no response to any question was given. The standard announcement by the Board president just before the public comment period was, “this is a public comment period not a debate session”. More recently, our Board has taken and encouraged the opposite tack. The 3 minute time period is more flexible and questions are answered immediately or, if more time is needed, off line. The administrators and [most] Board members are accessible to the public and are happy to meet one-on-one with citizens.

  16. I never thought I would say this, but it is time for the aides/paras to seek union representation. Todays tidy from that wretched Susan Tiede replete with warnings and suspensions is the most asinine thing i have read in years.

    For the future paras, and to protect their positions and the jobs they do for the kids, THEIR kids, the kids of THEIR community, its time to drop the gloves. Also who will raise the legality of a policy of NOT hiring kids from the district to teacher positions? If this is indeed true. it looks problematical, to say the least. Time to drop the bully with a right left.

    1. Mville,

      I have been wondering what you mean by “Todays tidy from that wretched Susan Tied replete with warning and suspensions……….” Were you referring to the letter Pattye posted?

      Also, I did not know there is a policy to NOT hire kids from the district to teacher positions.

      Could you please clarify. Thanks.

  17. If I was, I changed my mind. But I recall using the term “wretched” before. And if I changed, it was during the aide para debacle. I am not generally a union person, and may be considered a traitor and turncoat, but it seems these good and decent people need cover from the evil empire of the administration and board. Still waiting for this newly seated board to make a difference

    no fan of Sweet Sue.

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