More details on changes to teacher health benefits

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

In forcing the city’s teachers’ union to accept cuts to its members’ health care benefits, the School Reform Commission said the move will allow the financially battered School District to inject $44 million back into schools this year.

To seek clarity on the legal authority of breaking the collective bargaining agreement with the Philadelphia Federation of Teachers, the District and the state Department of Education filed suit asking the Commonwealth Court for a declaratory judgment that affirms the SRC’s right to make its unilateral move.

The brief, filed the same day that the new terms were announced, provides a look into the District’s legal argument and relevant portions of the state’s public school code. It argues that state legislation in 2012 clarified the legislature’s original intent to allow the SRC to cancel a collective bargaining agreement (page 23 of the brief).

The brief also gives concise explanations for each of the changes to PFT member health benefits and how much savings are expected.

Employee Medical Plan. In the 2013-14 school year, the standard medical plan for most of the School District’s employees, including those in the PFT bargaining units, was a customized Personal Choice 20/30/70 plan from Independence Blue Cross. Effective as of December 15, 2014, the School District’s standard employee medical plan for most employees, including those in the PFT bargaining units, will be the less costly Personal Choice 320 plan (or a substantially equivalent plan). Employees will have the option of maintaining their enrollment in the current Personal Choice 20/30/70 plan by paying 100% of the differential in the two plans’ premiums. The 320 plan will provide the same medical coverage as the current Personal Choice 20/30/70 plan but will increase the participant’s share of the cost through co-pays, deductibles and co-insurance, consistent with changes already agreed to by the administrators’ union.

[Estimated savings: $5.584 million.]

Employee Contribution to Medical Benefits. Starting on December 15, 2014, all employees in the PFT bargaining unit will be required to contribute between 5% and 13% of their monthly costs, depending upon the size of their salaries.

[Estimated savings: $7.366 million.]

Spousal Surcharge for Medical Coverage. Starting on December 15, 2014, employees whose spouses have declined coverage offered by their own employers in order to receive free medical benefits through the School District will be charged a spousal surcharge of $70 per pay period.

[Estimated savings: $4.087 million.]

Opt-out Credit for Medical Coverage. In the past, the School District paid an opt-out credit to employees who chose not to enroll in the medical benefits plan. Effective as of December 15, 2014, this credit has been eliminated.

[Estimated savings: $766,929.]

Contributions to the PFT Health & Welfare Fund. The new terms and conditions eliminate contributions to the Health and Welfare Fund run by the PFT, which has built up a large surplus. In their place will be a School District-administered plan covering dental, optical, and prescription drug benefits. The School District will not terminate contributions to the PFT’s Health and Welfare Fund until December 15, 2014. The District-administered plan will take effect on July 1, 2015.

[Estimated savings: $22.462 million.]

Uniform Per Diem Rate for Substitute Teachers. Last year, the per diem rate (which is the amount paid to substitute teachers) was higher if the substitute was a retiree. Starting on October 6, 2014, the per diem rate for certified teachers will apply to all substitute teachers, whether or not retired.

[Estimated savings: $2.04 million.]

Contributions to PFT Legal Fund. In the past, the School District made contributions to a PFT-administered fund that provided certain legal services free of charge to PFT bargaining unit employees. These contributions have been eliminated, effective as of October 6, 2014.

[Estimated savings: $1.369 million.]

Wage Continuation Benefits. The amount of wage continuation benefits, i.e., sick leave and short-term disability leave, has been reduced as of December 15, 2014.

[Estimated savings: $23,346.]

Termination Pay Benefits. Starting on December 15, 2014, the amount of reimbursable accrued and unused vacation, sick and personal time that is paid upon termination of employment will be reduced, but for new hires only.[Estimated savings: $99,265.]