Muskego-Norway School District will pay employees who opt out of health plan

Muskego - The least expensive of three options to encourage employees to opt out of the Muskego-Norway School District health insurance plan has won the approval of the School Board.

The district will continue to pay employees 87.4 percent of the premium for single coverage if they take insurance from the employer of a working spouse. That will come to about $6,900 next year.

The $784,785 cost of the opt-outs is sizable, but the program has been shown to actually save money for the district, said board member Brett Hyde.

In a full year, the opt-out plan would avoid nearly $1.5 million in premiums, leaving a net savings of $673,560, said Scot Ecker, director of business services.

The savings estimates are based on the belief that the district's health insurance plan probably is more attractive than plans spouses have in private industry, said School Board President Jim Schaefer. If the schools' health plan were comparable to those plans, the opt-out option wouldn't make sense, he said.

Although Muskego-Norway has already pared down its health insurance plan, it must continue to be competitive with other school districts, Schaefer said. For that reason, comparing the district's plan to those in the private sector is somewhat risky.

The opt-out payment is based on 87.4 percent of the premium for single coverage, Ecker said.

Even though the district pays its normal 87.4 percent in the opt-out, it saves because it's paying 87.4 percent of the single coverage whereas those who opt out would take family coverage, which is twice as expensive, Ecker said.

Muskego-Norway isn't the only district offering opt-outs for health insurance. Of the 36 area districts in CESA 1, 23 give opt-outs ranging from $9,216 in Shorewood to $3,000 in Mukwonago and Cudahy, Ecker said. Of the 23, Muskego's $8,676 this year is fifth highest. The median opt-out is $6,000.

The opt-out amount will drop drastically in Muskego to $6,900 because the total tab for health insurance will be down, Ecker said. That's because the district will move from the Wisconsin Education Association health insurance plan to United Healthcare and because the plan itself has changed.

While the School Board opted to keep the 87.4 percent of premiums for the opt-out amount, it considered giving more.

The other two opt-out options were to keep the payment at the current $8,400 or to reduce it slightly to $8,200. Those two higher opt-out options had some appeal because they would have reduced the financial impact on families.

That, too, is why the board elected to let couples who get both the district's health insurance and the opt-out to continue to do that, but nobody else will be allowed to. Currently, eight of the 105 employees taking opt-outs have spouses working in the district who take the health insurance. That comes to $69,400.