Saugatuck School District Saves Big on Insurance

The Grand Rapids Press reports that teachers in Saugatuck Public Schools will no longer be provided with health insurance from the Michigan Education Special Services Association, an arm of the state's largest teachers union. The district instead will purchase employee insurance from Priority Health, a move that is said to save $3,800 per teacher annually.

If similar savings were extended to all of Michigan's 103,801 full-time teachers it would come to $394.4 million annually. For various reasons this is unlikely. Not every district would be able to achieve the same level of savings. Also, some districts have already made similar adjustments.

In one sense, however, the statewide projection understates potential savings, since the same health care benefits generally are granted to other school employees, including guidance counselors, coordinators, social workers, directors, librarians and others covered under the same union contracts. These number nearly 25,000 statewide.

Nevertheless, if such savings were applied to even a portion of school employees statewide, the impact would be significant. Districts where savings are realized could use the money to keep class sizes small, and maintain or expand academic and extracurricular programs. The savings could also be used to relieve local property tax burdens.

None of these alternatives will apply to Saugatuck, however, which instead will use the insurance savings to increase teacher compensation in other ways. Specifically, under its new union contract Saugatuck teachers are granted a 2.75 percent across-the-board salary increase this year and 2.25 next year, in addition to longevity-based "step" increases for individual employees.

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