Employers of 50 or more might want to begin battening down the hatches and start stowing away money. When the Affordable Care Act (ACC) takes effect in 2014 there will be two options — insure all employees or take a penalty.
A smaller organization that will be taking on a substantial financial hardship under the ACC is the ANW Special Education Cooperative.
ANW serves school districts in Erie, Marmaton Valley, Iola, Humboldt, Yates Center, Altoona-Midway, Chanute and Crest.
Currently ANW insures all of its certified professional staff, which includes teachers. The consortium does not, however, insure its paraeducators — school employees who work under the supervision of teachers or other professional practitioners.
ANW administrators have been shopping for insurance and crunching numbers. They found taking the penalty will end up being less expensive. Insuring all employees will not be feasible for the organization.
“We would love to give all our employees insurance,” ANW director Robert Coleman said. “As a director, I have to say that it is not a financially viable option.”
The penalty is $2,000 annually for each full-time employee. With 216 paraeducators, the total penalty would come to a little over $400,000. The penalty also increases each year.
To insure all employees it would cost $7,200 per employee, according to Coleman. Bringing the total cost to over $1 million.
ANW IS FUNDED by the eight districts it serves. Each district gets money from the state. Some of that money is then turned around and allocated to ANW based on need, Iola School District Superintendent Brian Pekarek said.
The more students in a district, the more money that school district flows over to the co-op, Pekarek said.
According to Coleman, ANW has and will continue to save up money for whatever financial burden they will end up taking on, but they can only save so much money. Eventually, the districts will have to pay more.
“The cost would be so great (to insure all employees),” Coleman said. “Where are they going to get the money?”
One option Coleman said would make the costs more affordable is if ANW could give its employees different healthcare plans.
Coleman consulted a Kansas Association of School Boards attorney recently and was told two sets of healthcare coverages could not be given to employees, Coleman said.
“If we had the option of offering a differentiated policy to paras then maybe it would be more feasible,” Coleman said.
