News Story

District Dumps Union Insurance, Saves $450K and Pays 100% of Health Care

Dansville switches from MESSA

As school districts around Michigan grapple with how to balance their budgets, Dansville Public Schools found a way to save nearly a half million dollars over the past two years by dumping its union-affiliated insurance plan.

Dansville Superintendent Amy Hodgson said the district saved about $250,000 in 2011-12 and another $200,000 in 2012-13 by switching from the Michigan Education Special Services Association (MESSA), which is an affiliate of the Michigan Education Association, to a high deductible plan. Not only did the district realize $450,000 in savings, but it also has been able to pay 100 percent of the premiums and deductibles for its teachers and still stay under the state's hard cap limit, Hodgson said in an email. Teachers are responsible for varying copays, she said. The district, located about 20 miles from Lansing, had a general fund budget of $7.5 million in 2012-13.

Hodgson said the district is responsible for paying the higher deductible in 2012-13.

A spokesman for MESSA said he thinks the district will regret its decision to change its coverage.

"It's a very competitive market," said Gary Fralick, director of communications and government relations for MESSA. "This district has taken on a large self-insured risk. Like other districts, I predict they will be back with MESSA soon."

However, not everyone agrees.

"Dansville clearly is doing the right thing by choosing a different health insurance provider," said Audrey Spalding, the Mackinac Center for Public Policy’s director of education policy. "Other districts should follow Dansville's lead and shop for the cheapest, best insurance."

MESSA has long been the favored insured plan in public schools. But with budget concerns many districts are shopping around for health insurance.

In Pontiac, MESSA is threatening to cut off its health insurance to teachers in the Pontiac School District if the full $7.8 million the district owes isn’t paid by the end of this month. A judge has said Pontiac has 10 years to pay off its debt.

Nicole Kolhagen, the Pontiac School District's benefits coordinator, said employees are covered by MESSA until the end of July. She said the district is in the process of getting quotes for new insurance.


See also:

Michigan Capitol Confidential Coverage of MESSAa>

MEA Demands Immediate Health Insurance Payment From School District In Serious Debt

In Pontiac, MEA Local Raises $12K For School Supplies While Union Health Insurance Arm Sues District For $7.8 Million