AISD Union Leaders Butt Heads Over Insurance Costs

Low-wage workers pay more for increase in health plan rates

AISD Union Leaders Butt Heads Over Insurance Costs

When the Austin Independent School District raises salaries, its lowest paid staff see the least gain. Now, as the district raises insurance rates, those same low-paid staff are likely to get hit hardest.

AISD is currently holding open enrollment for its employee insurance, and educating staff that premiums will double for their top-level package (see "School District Staff Face Big Health Care Rate Hike," June 7.) In June, six district employees at Becker Elementary filed a formal grievance with the district, arguing that the hike places a disproportionate burden on its lowest-paid employees: They already pay more per paycheck than many of their AISD colleagues, and will see the biggest increase. Joaquin Abrego, a labor organizer with the Southwest Workers Union, said, "You put 131% on anything, that's a lot."

It comes down to how employees pay for their insurance. Most AISD staff, such as teachers and administrators, are on 12-month contracts, and their premiums are split across a full year's paychecks. Classi­fied employees, such as custodians and bus drivers, are only contracted for the nine months of the school year. Out of term time, they have to look for other employment. But because their insurance covers them for the full year, they pay for their entire annual contribution out of nine AISD paychecks, not 12. That means they also absorb any raises in a shorter pay cycle, too.

AISD offers three levels of insurance: The top plan, PPO 1 (PPO stands for Pre­ferred Provider Organization), requires an employee contribution, while PPO 2 and PPO 3, Health Savings Accounts, are free to employees. In the 2012 school year, a 12-month employee on PPO 1 would pay $54 a month, compared to $72 for a nine-month employee. In the upcoming 2013 school year, a teacher would see a $71 increase to $125 a month, while a custodian would see his or her contribution go up $94.67 a month to $166.67. Staff can always opt for PPO 2 or PPO 3, which provide free coverage for all employees. But they still have to pay extra to add kids or spouses. A 12-month employee on PPO 2 wanting to insure his or her family pays $676.02 a month, while nine-month employees pay out $901.36.

With 200 members, SWU is the third largest employee group at AISD, after the much larger Education Austin and the Assoc­i­a­tion of Texas Professional Educators. However, unlike those entities, SWU's members are solely classified. Abrego said, "The people we've been talking to, and the people that have signed the grievance, and the ones that are afraid to sign the grievance, have the lowest insurance possible, and we know that they're going to be paying the highest deductible."

However, he is not alone in representing classified employees. They make up around a third of the 3,000 members of Education Austin, the district's biggest union. Its president, Ken Zarifis, sits on the district's insurance committee and argues that AISD is doing the best it can in a bad circumstance. "This district puts in more money per employee than any Central Texas or Big 8 district in Texas," he said, and this new raise is simply passing on some of the cost from the insurer.

Four years ago, AISD shifted from a single plan HMO to its current PPO system. The insurance committee picked Blue Cross Blue Shield, in part because it would ensure a high standard of plan, and in part because it would provide cheaper family coverage. "That said, it's still expensive," Zarifis said. For him, the problem is that "there are very few companies out there that will provide a comprehensive plan for a large district like this."

AISD is already expecting around a third of the 7,287 employees currently paying for the PPO 1 plan to drop down to the basic PPO 2 package. The question now is, how many classified employees will look long and hard at how they cover spouses and children. Abrego said, "This is just a fact: The majority of classified employees are just above the poverty level." Moreover, he argues that classified staff are most likely to need health care: They are the bus drivers on the packed road, the catering staff equipped with sharp knives and large powered equipment, and cleaning staff working with chemicals. He said, "Their health is on the line all the time."

Education Austin and SWU have traded sharp barbs on this issue. Zarifis said that Abrego's organization does not understand the issues, while Abrego countered that "Education Austin says we have to stop going against the grain." However, they agree that AISD needs to do more for classified staff. They may be among the best paid in Texas' school districts, but that's not saying much – especially with Austin's rapidly escalating housing prices and the district's irregular pay increases. Zarifis said, "Bad pay is bad pay, even if you're at the top of the heap."

Another issue is the district's de facto policy of across-the-board percentage pay increases, rather than targeted or dollar-amount raises that would better benefit the lowest paid. While the 3% raise introduced this academic year means some senior administrators have seen thousands extra added to their annual salary, Abrego said, "A lot of classified employees weren't seeing very much in their pay packet."

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AISD, Austin ISD, Joaquin Abrego, Southwest Workers Union, insurance, health care, Education Austin, Ken Zarifis

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