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Rates to double for retired teachers on East’s insurance plan

Updated: January 3, 2013 6:27AM

AURORA — Retired East Aurora teachers say they were notified by district officials this week that their health insurance rates will more than double starting Jan. 1.

With five months left before the open enrollment for the state’s Teacher Retirement Service — the other health plan option for retired teachers — former elementary teacher Pat Rivait and others feared they will be stuck in the district’s costly plan.

Late Friday, after being contacted by the Beacon-News, East Aurora spokesman Clayton Muhammad said the district and its insurance provider would “drop” retired teachers from the district’s insurance at their request, allowing them to enroll in the TRS system Jan. 1, before the May open enrollment date. Dave Urbanek, spokesman for the Teachers’ Retirement Systems of Illinois, confirmed that if the district’s insurance provider cuts a retired teacher, the teacher has the opportunity to apply for state coverage immediately.

But earlier in the week, Rivait, who retired 18 months ago from Gates Elementary School after 31 years with the district, told the Beacon-News that district officials were unwilling to drop her from the plan, effectively barring her from switching to the TRS plan until May.

Muhammad said the district decided to honor retired teachers requests’ to drop their individual policy after the district received complaints from a number of retired teachers.

Bad bookkeeping

About 100 retired teachers on the district’s plan were notified via letter of the impending new rates, but many others did not. District officials did not have all of the teachers affected by the switch on a master list.

Once again, the financial department’s “sloppy record keeping” dating back to the mid-1990s is to blame, Muhammad said.

“We had those that were calling that weren’t on our database list (and didn’t receive a letter),” Muhammad said. “ We don’t know how (many) more there might be. Had those teachers not called, we would not be aware of this (problem).”

Retired teachers who did not receive this notice should call East Aurora Service Center at 630-299-5550 and ask to speak to the insurance department.

In September, after a series of financial discrepancies began to surface, the district’s former finance chief, Jay Augustine, retired unexpectedly from his position as assistant superintendent of finance. The next month, Penny Halvax, Augustine’s secretary, was fired because of “discrepancies in record keeping for the district’s insurance,” according to Muhammad.

New rates

Initially, Rivait was saving $150 a month by sticking with the district’s plan over the TRS plan.

That sounded like a smart move, until she received a letter from the district this week informing her that the district’s health insurance benefits for retired teachers would go up more than 250 percent, meaning a retired individual will have to pay $5,000 more per year and a retired teacher’s family would be out $14,000 more a year.

“I thought it was a mistake ... I thought, this can’t possibly be right,” Rivait said. “There was no warning, nothing.”

Muhammad said the new rates are result on an insurance audit the district underwent after several financial discrepancies were discovered earlier this year.

“As the district moves forward from the audit, we’re really aligning to what other districts do and best practices,” Muhammad said.

Overall, the district is saving $600,000 under the new insurance plan with the Blue Cross and Blue Shield, according to East Aurora School Board President Annette Johnson.

According to district documents, a Blue Cross Blue Shield PPO insurance plan for a retiree as of July 2011 was $253 per month for a single health plan and $718 per month for a family health plan. Beginning in January 2013, the cost of that same Blue Cross Blue Shield retiree insurance plan is $677 per month for a single health plan and $1,727 per month for a family health plan.

Under the new plan, the cost of dental and vision will decrease by about $1.

Muhammad added that on Jan. 1, 2012, the district switched to United Healthcare. In 2013, the district will switch back to Blue Cross Blue Shield.

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