The Kenosha School District will save almost $20 million a year in premiums by switching insurance carriers and ditching WEA Trust. District employees will also save $5 million. #wiright #wipolitics Click To Tweet
MacIver News Service | May 14, 2019
By Abby Streu
A recent decision by the Kenosha Unified School Board to change the district’s health insurance provider is not sitting well with the local teachers’ union, the Kenosha Education Association (KEA).
The school district will save almost $20 million a year in premiums by switching insurance carriers and ditching WEA Trust.
The plan selected by the board, United Healthcare, would replace the district’s previous provider, the Wisconsin Education Association (WEA) Trust. As the name suggests, WEA Trust was created in 1970 by the Wisconsin Education Association Council (WEAC) to insure public school employees, but has since expanded to cover a large assortment of Wisconsin public employees. While they are not owned by WEAC, they are still affiliated.
The school district’s current annual premiums amount to $60.1 million under the WEA Trust, with premiums projected to increase by $10 million, were the plan renewed. The new plan under United Healthcare is projected to cost $41.8 million in annual premiums.
Individual employees will also see personal savings on premiums with the new contract. While under the WEA Trust contracts, employees paid a collective $9.6 million of their annual premiums. Under the United Healthcare contracts, employees are projected to contribute $4.6 million.
WEA Trust has controlled the market for health insurance for Wisconsin public schools in the past. During the 2010-2011, two-thirds of Wisconsin school districts contracted WEA Trust for health insurance. In 2011, the passing of Act 10 permitted school districts to more easily change insurance providers, which has caused overall statewide savings of $3.2 billion from school districts alone.
Act 10 permitted school districts to more easily change insurance providers, which has caused overall statewide savings of $3.2 billion from school districts alone.
In 2012, one year after Act 10 was passed, WEA Trust endured a $70 million loss after losing a third of the schools it previously provided insurance for. With the increased freedom in their insurance market, school districts continue to transition from WEA Trust, which was often strongly encouraged or required for districts to choose in union contracts.
Like other school districts that also switched from WEA Trust after Act 10, Kenosha Unified will not be missing out on any savings.
Despite these savings, many district employees belonging to the KEA showed up at the school board’s vote to advocate on behalf of the WEA Trust. The union employees expressed that switching providers may cost Kenosha Unified its ability to retain and attract excellent teachers. The president of the school board responded by saying that the savings will allow the school district to keep class sizes low and have the potential for raises.
In the end, cost-effective measures won out over the will of the union.