Rate hike takes up most of savings

EDMORE, Mich. - Teachers in Montabella Community Schools agreed to higher deductibles and co-pays as a way to bring down health insurance costs, only to learn that their insurance administrator will raise premium rates by about 15 percent in the coming year, according to The (Greenville) Daily News.

While the district had estimated it would save about $133,000, the increase charged by the Michigan Education Special Services Association will take up about $92,000 of that amount, Superintendent Ron Farrell said, according to The News. The district did not learn about the increase until after it signed the new labor agreement, The News reported.

MESSA is a third-party insurance administrator that sells Blue Cross Blue Shield insurance to a majority of Michigan public school districts. It is affiliated with the Michigan Education Association.

In addition to the new health care plan, the contract also calls for teachers to receive a 1 percent salary increase, but no "step" increases in 2010-2011, The News reported. If the district's fund equity exceeds predictions by at least $100,000, MEA members will receive an additional 0.5 percent salary increase, according to The News.

The (Greenville) Daily News, "Montabella teachers, district reach agreement," May 7, 2010

Mackinac Center for Public Policy, "More Money for MESSA," April 24, 2010