Local school systems weighing options to comply with health reform
by Patrick McCreless
Nov 29, 2013 | 3107 views |  0 comments | 70 70 recommendations | email to a friend | print
Local school systems are considering outsourcing management of their substitute teacher programs to avoid higher insurance costs and fines under upcoming federal health care reform.

The Affordable Care Act next year will require employers to provide insurance for employees who work at least 30 hours a week or else face fines. Saying they cannot afford the fines or the higher insurance costs, some area school systems could soon hire staffing firms to manage their substitute teacher programs — providing better oversight to ensure those substitutes do not exceed the 30-hour-per-week threshold.

Just in the past month, the Calhoun County and Anniston school boards have reviewed the option of contracting out the substitute teacher programs.

"The health care reform is probably the catalyst for this," Anniston Superintendent Joan Frazier said after a school board meeting earlier this month.

During the Anniston school board's last meeting, members learned the school system could face a federal penalty of up to $543,000 if it doesn't comply with the federal law. Meanwhile, the Calhoun County school board discovered during its meeting earlier this month that it could face a $2.4 million penalty if it doesn't comply. School systems have until the start of the next school year to comply with the law.

"It's been a lot of heartache ... we're all trying to figure out what to do," said Leslie Bollendorf, chief financial officer for the Calhoun County school system. "There's no option for opting out just because you're a school system."

Bollendorf said the penalties will be different for each school system since they each employ different numbers of substitutes. The county school system employs between 30 and 40 substitutes on any given day.

Bollendorf said the county board is still considering its options, but added that hiring a staffing firm would help the system avoid paying penalties and higher insurance costs. Hiring a firm would cost the county an estimated $240,000 a year.

"We as a system cannot manage it," Bollendorf said. "We have a program we use, but it is not effective nor efficient."

Jon Campbell, superintendent of the Jacksonville school system, said his board is also considering hiring a staffing firm to manage its substitute teacher program to keep substitutes from working 30 hours a week. Campbell said he did not have a cost estimate, but the cost of health insurance for Jacksonville's substitute teachers would be “astronomical” and the system would be unable to afford it.

"It will take a lot of supervision to ensure substitutes don't exceed that amount of hours," Campbell said.

Campbell noted that because Jacksonville is a relatively small school system compared to others in the county, it might be more cost-effective to simply hire another bookkeeper instead of an outside firm.

"We might possibly hire an additional bookkeeper to keep up with the added paperwork," Campbell said. "Some of the estimates we've seen to hire a firm would cost more than if we hired a part-time bookkeeper."

Due to growing questions and concerns about the health care changes from state school systems, the Alabama State Department of Education recently compiled answers and its recommendations on the matter.

The state Education Department recommends school systems not simply hire an outside firm to manage their substitute teachers, due to the extra cost, without first examining other options. For example, because each school board is a separate employer, a substitute teacher can work in two school systems, remain under 30 hours per week at each and not cause an ACA penalty for the boards, the department states.

Debbie Nothdurft, director of human resources for the Oxford school system, said the Oxford Board of Education is also weighing its options regarding the health care law changes. Nothdurft said Oxford is using its own personnel to call and set up substitutes.

"But at this point yes, we are considering going with an agency to help us," Nothdurft said. "We want to make sure we treat people correctly ... but right now we're still in the research phase."

Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.

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