The Pine River-Backus School Board learned about the district’s strengths and weaknesses in the face of the Affordable Care Act (ACA) on Monday, Aug. 19.
Research into the ACA is under way in preparation for contract negotiations. In a report, Human Resources Executive Cindy Felthous said there are many uncertainties with the law. Using the most current information on the ACA, the district had its numbers analyzed to highlight issues with compliance.
PR-B School was in compliance with many of the rules pertaining to the ACA, but was out of compliance with others pertaining to affordability.
Felthous said the ACA report said the school must offer minimum essential coverage to at least 95 percent of full-time employees. PR-B currently offers coverage to 100 percent of employees. Penalty for noncompliance would have been $166.67 multiplied by the number of full-time employees minus 30 for each month of noncompliance.
The school was found to be out of compliance for affordability. The ACA report said coverage was unaffordable if the employee health insurance contribution was 9.5 percent or more of the household income. It was found that this was the case for 36 school employees. The penalty for noncompliance in this area is $250 per month per employee who receives a subsidy to help pay for health care. These employees must apply and be qualified for a subsidy.
Council member Jason Marcum asked how the district could bring itself into compliance. Felthous explained that raises are only one option, but some businesses have either decided not to offer health care, or to ignore noncompliant issues.
In either case, those employers are deciding to pay for the fees and penalties as a solution. Felthous said these are items to be discussed during contract negotiations.
In its current situation, the worst the district could expect to pay is $108,000 in penalties for its 36 employees.
The report also checked the school for nondiscrimination. The district does not offer benefits to the highest paid employees that outweigh those of the lowest paid employees. Because it offers all employees the same options, the district was found to be in compliance.
Another weakness was participation. Though not out of compliance, the district is only marginally compliant with approximately 36 percent of employees currently on the district’s group plan.