For Immediate Release — March 22, 2018
Dear P.E.A. Members,
I just received a letter from the District stating that before the end of the school year, the District is ‘contemplating’ a move out of the ‘School Employee Health Benefits Plan’ (SEHBP) into a ‘self-insured’ medical insurance plan. To be clear, the District has the legal right to change carriers. However, they can only do so if they maintain the same level of medical benefits. While the district has stated it intends to maintain the same level of benefits, know that this is not a move that the Union supports. More than that, however, we find this to be a very risky proposition for the reasons listed below:
- We have consulted with many experts, and all are in agreement that self-insurance for a District with the size and experience rating of Paterson is a risky move. There is a strong probability that after one/two years of self-insurance, the District will be forced to return to the SEHBP because the cost of self-insurance will become cost prohibitive to maintain that arrangement.
- In 2015, you may recall that the District changed the prescription carrier from Express Scripts to Benecard (this serves as an example and is unrelated to the aforementioned proposed change) the District handled the role out very poorly. The Union fielded hundreds of phone calls from members with issues ranging from missing prescription cards to not being able to fill a prescription. I personally fielded and resolved hundreds of calls for service. Take it from me, it was a chaotic mess that took months to resolve.
- At this point, the Union hasn’t been advised whether the new doctor networks in a self-insured medical plan will be the same as the existing doctor networks in the SEHBP. In short, we have been provided with very little information. Thus, we are not yet aware if your doctors will participate in the change that the district is contemplating. This gives our members precious little time to ensure that there is not a disruption of service.
- The District has gone down this road in the late 1980’s. Members that we have spoken to have stated that it was not successful and led to the Union filing a massive number of grievances.
- In 2010, the city of Paterson transitioned to a self-insurance plan for all municipal employees. At that time, the cost of medical benefits was $29 million dollars. In the year 2017, even while the number of municipal employees decreased, the cost of medical benefits jumped by 80% under a self-insured plan to $52.5 million dollars. Not surprisingly, the city is rumored to be transitioning back into the State Health Benefits Plan as soon as possible.
This plan hatched by business administrator Mr. Richard Matthews is both penny wise, but pound foolish. At this time, we do not have any further information regarding this proposed change. Since the District placed the Union on notice, we thought that it was only fair to alert our members as soon as possible.
We urge you to contact Paterson Public Schools business administrator, Mr. Matthews at rlmatthews@
John McEntee, Jr., President