By Joshua Benton
It may be only $42. But the newest cut in teachers’ paychecks has some of them fighting mad.
“The amount is small, but it enrages our members far beyond the dollars involved,” said John Cole, president of the Texas Federation of Teachers.
At issue is a change in the health-care stipends that teachers receive from the state. Starting Sept. 1, $30 to $42 will be deducted from each teacher’s annual income to pay insurance company Aetna, which will administer the state’s new health savings program. Aetna’s fees add up to more than $20 million a year for what some Texas teachers contend is no work at all.
They pledge to make it an issue in the fall’s legislative campaigns if Aetna isn’t given the boot. The Legislature already cut teachers’ health-care stipends in half last year.
“It’s just a slap in the face to teachers,” said Judy Bryant, a teacher at Dallas’ Health Special High School. “We need that money.”
The Legislature created the health-care stipends in 2001 and originally gave school district employees $1,000 a year. That sum could be used to pay health insurance premiums or any other benefit offered by a school district. Teachers could also take it as salary, though it would then become subject to federal income tax.
In its 2003 regular session, the Legislature, facing a budget crunch, considered eliminating the stipend altogether. In the end, it cut the stipend to $500 for teachers and $250 for part-time employees. The stipend for administrators was eliminated.
The Legislature also changed the way the money would be distributed. Under the old system, the funds went directly to school districts, which then distributed them to employees. Under the new system, the money is deposited into individual health reimbursement accounts, or HRAs.
HRAs restrict how the money can be used; for example, it can no longer be taken as salary. But the accounts allow teachers greater flexibility in how they spend their money tax-free, such as on visits to doctors not covered in a district’s health plan.
HRAs also require a firm to administer the accounts. So the Teacher Retirement System requested bids, and Aetna won. The company will charge teachers $2.50 a month in administrative fees, plus an additional $1 for teachers who want to use a debit card.
“They’re getting paid just to have our money sit in their accounts for a nanosecond,” Mr. Cole said.
Aetna’s expenses were substantially higher than what the HRA’s legislative backer, Rep. Dianne Delisi, expected.
“All the testimony we had heard was that administrative costs were typically $15 to $18 a year,” the Temple Republican said.
When asked Tuesday for comment on the fees and its contract, an Aetna spokesman issued a four-sentence statement, saying that HRAs can produce tax savings for teachers and that Aetna is “pleased to be working with TRS and Texas teachers to make this a positive experience.”
Ms. Delisi sponsored a House plan in 2003 to create the reimbursement accounts. But in this summer’s special session, she sought to postpone the introduction of HRAs until the Legislature could meet again and reconsider. Her proposal was in the main school finance bill that passed the House but never reached a vote in the Senate.
“Hindsight is always better,” she said. “If I had known what the bid would be from Aetna, then my course of action would have been different.”
Mr. Cole said he wants the Legislative Budget Board to stop the new policy’s implementation by refusing to approve the funds the Teacher Retirement System would need to start the accounts. But Ms. Delisi said that was unlikely.
Mr. Cole said his group would demand pledges from all candidates that they will reconsider the program and Aetna’s fees in the next session.
“It’s a sweet deal for Aetna, but it’s a rotten deal for school employees,” he said.
Ms. Delisi said the reimbursement accounts and Aetna’s fees would be more acceptable if the stipend were larger. She added that she hopes the state’s financial picture will allow a return to the larger stipend in the next session.