QuotED

The place where I think we have

potential is in administrative
and support services.
Mildred Warner, Cornell
professor, on what kinds of governmental
collaboration hold the most opportunity
to save money (page 19)

School Policy
Reorganization
meeting tips
PAGE 9

Centerfold
Music teacher
wins a Grammy
PAGES 10-11

Schools Today
The Common Core
and parents
PAGE 17
ON BOARD
The Voice of Public School Leadership
By Paul Heiser
SENIOR RESEARCH ANALYST
More than a fifth of school districts in
New York State could be whacked with a
new tax on teacher health plans in a few
years under a provision of the Obamacare
law.
If health care premiums for teachers
continue to increase at recent rates (5.6
percent annually for individual coverage
and 5.7 percent for family coverage), as
many as 157 districts would have to pay
penalties under the Cadillac tax provi-
sion of the Affordable Care Act of 2010,
according to a NYSSBA analysis. Because
health plans of all employees not just
teachers are affected, the actual number
of districts impacted by the tax may be
even greater.
The Cadillac tax goes into effect in
2018 and will apply to health insurance
premiums that exceed certain amounts
$10,400 for an individual plan and
$27,500 for a family plan. If plans exceed
those thresholds, employers must pay a 40
percent tax on the excess premiums for
each participant in the plan.
For example, if a districts individual
coverage plan has a premium of $11,200,
the district would be required to pay a 40
percent tax on the amount by which the
premium exceeded the threshold in this
case, $800 multiplied by the number of
plan enrollees.
The tax was designed to discourage
employers from offering high-cost health
plans, as well as to reduce incentives for
employees to overuse medical services
under deluxe health plans.
NYSSBA estimates the cost of tax
penalties on teacher health plans for af-
fected school districts and BOCES in New
York in 2018 alone will total $22 million,
or $147,000 per district. That assumes cur-
rent coverage plans remain in place and
premiums continue to climb at the same
rate as the last five years. The analysis is
based on data on health insurance premi-
ums reported by school districts when re-
sponding to an annual survey conducted
by NYSSBA in 2013.
The possibility of generous benefits
resulting in a tax penalty for school dis-
tricts is likely to cast a shadow over con-
tract negotiations in many school districts
in the next few years.
The topic needs to be broached with
bargaining units in a constructive way, said
Tracie Lopardi, a partner in the Harris
Beach law firm. Districts should ap-
proach bargaining units and explain that
there are limited funds that can be used for
employee compensation, and funds that
are spent on Cadillac health insurance
and the associated excise tax are funds that
cannot be used to preserve jobs, programs
and/or provide other compensation, she
said.
See related story, page 7.
NYSSBA analysis
Districts vulnerable to Cadillac tax
NEW YORK STATE SCHOOL BOARDS ASSOCIATION www.nyssba.org Vol. 15, No. 9 May 12, 2014
All teachers, administrators
need training on ELLs: SED
By Eric D. Randall
EDITOR-IN-CHIEF
Draft state regulations will require all
teachers and administrators to receive
professional development on the needs of
English language learners, including
training on language acquisition and the
ability to work effectively with diverse
students, according to the State Educa-
tion Department.
The proposed regulations are in-
tended to make it clear that placing ELLs
in an English-speaking environment
(called immersion) is unacceptable un-
less there is a system of supports that will
enable these students to succeed academi-
cally.
All school boards and district/
school leaders are responsible for ensur-
ing that the academic, linguistic, social,
and emotional needs of ELLs are ad-
dressed, according to a supporting state
document called Blueprint For English
Language Learners Success.
Specifically, boards should provide
a clear vision for student success that in-
cludes high expectations for ELL student
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See ELLs, page 4
If health insurance premiums for individual teachers continue to increase at 5.6 percent annually,
the average premium will hit the Cadillac tax threshold in 2019.
Insurance premiums headed
for tax penalty threshold
Source: NYSSBA research
C a d i l l a c T a x T h r e s h o l d ( 2 0 1 8 )
New sport
Senior Matthew Mahoski, a cheerleader in Oyster Bay,
demonstrates prowess in New Yorks newest sport. See
story, page 3. E Photo courtesy of Oyster Bay-East Norwich
Central School District
N e w Y o r k S t a t e S c h o o l B o a r d s A s s o c i a t i o n | w w w . n y s s b a . o r g
Cadillac tax to be bargaining issue
By Paul Heiser
SENIOR RESEARCH ANALYST
Excise taxes are imposed by governments on spe-
cific goods or services to raise revenue, discourage spe-
cific kinds of behavior, or both. Taxes on gasoline, for
example, raise revenue that can be used to maintain
roads and discourage people from buying gas-guzzling
vehicles.
Another example is the so-called Cadillac tax
that was included in the federal Affordable Care Act
commonly known as Obamacare to discourage em-
ployers from offering health plans with benefits so
generous that they might prompt employees to overuse
health care.
Under the Cadillac tax, employers will be as-
sessed a hefty 40 percent tax on employer-provided
health insurance plans that exceed certain threshold
amounts: $10,400 for an individual plan and $27,500
for a family plan.
According to a NYSSBA analysis, as many as 157
school districts could be hit with the Cadillac tax in
2018 if current plans remain in place and health care
costs continue to increase at recent levels. The analy-
sis found that 150 school districts would have individ-
ual premiums in excess of $10,400 and 18 districts
would have family premiums in excess of $27,500.
[Because 11 districts would pay both taxes, the number
of districts affected is 157.]
The tax would cost the 150 school districts with in-
dividual premiums above $10,400 a total of $22 million
in 2018 and the 18 districts with family premiums
greater than $27,500 a total of $4 million in 2018, for a
combined cost of $26 million.
NYSSBAs analysis relied on information submit-
ted by school districts in response to annual teacher
contract surveys conducted by NYSSBA over the past
five years. The annual survey asks school districts for
data on teacher salaries and health insurance premiums.
Because the data are restricted to teachers, the actual
number of districts impacted by the Cadillac tax could
be greater if administrators and non-teaching staff are
included.
Based on the survey data, the average annual health
insurance premium increase for the past five years was
5.6 percent for individual coverage and 5.7 percent for
family coverage. By applying those average increases
to the most recent premium amounts for 2012-13,
NYSSBA was able to estimate the 2018 health care
premiums for all districts that responded to the 2013
survey.
For each of the impacted school districts, the
amount of the tax was calculated by multiplying the
amount of the premium in excess of the corresponding
threshold amounts by 40 percent, which is the excise
tax rate that the district must pay for each employee.
The amount of the tax was then multiplied by the num-
ber of teachers in each district to arrive at a total dollar
amount of the cost of the tax to each of the affected
school districts.
Impact on collective bargaining
This is a risk, particularly if districts continue to
offer the old-fashioned indemnity plans, said Judi
Kehoe, chief business and financial officer for the Beth-
lehem Central School District in Albany County. Such
indemnity plans dont carry co-pays, but rather have de-
ductibles that must be reached before the plan covers
100 percent of the costs. The plans cost more because
they do not manage access to care, as is typically done
for plans that use a network of health care providers.
Bethlehem has finally negotiated all of these types
of plans away by offering alternate plans that still pro-
vide gold-level benefits, but I know there are a num-
ber of other districts that struggle to negotiate these out
of their agreements, said Kehoe. Although its not
coming until 2018, and while there could yet be other
modifications, I think it doesnt hurt to remind districts
of this facet.
While employers in the private, non-unionized sec-
tor have already begun changing their employee bene-
fits plans to circumvent the tax, unionized school
districts may be limited by language in their collective
bargaining agreements.
Law partners Hank Sobota, Eric Wilson and Craig
Atlas of the Ferrara, Fiorenza, Larrison, Barrett and
Reitz law firm said teacher unions and school districts
have staked out different positions on the Cadillac tax.
Districts say that when a law creates new taxes on a
previously negotiated benefit, the people receiving the
benefit should either agree to pay the tax or agree to a
new version of the health plan that is below the Cadillac
tax level, especially considering the financial pressures
that school districts face. But teacher unions note the
law imposes the tax on employers. They see no obliga-
tion to agree to pay all or part of the cost. Nor are they
keen to have union members receive less generous ben-
efits, particularly if the economy improves in the next
few years and districts receive more tax revenue.
Sobota, Wilson and Atlas recommend three possi-
ble bargaining proposals for school districts:
Negotiate a health care benefit program that com-
plies with the Affordable Care Act and avoids the
excise tax.
Allow for a contract reopener to address issues that
may arise as it gets closer to the effective date of
the tax.
Devise a method of calculating the employer and
employee share of the cost of the premiums to ensure
that the cost includes any excise tax.
May 12, 2014 ISSUES IN EDUCATION On Board 7
Economic downturn leads to uptick in STEM majors
The Great Recession spurred increased enrollments in the so-called
STEM fields of science, technology, engineering and math, according to a re-
port in the Chronicle of Higher Education.
The report, titled STEM Majors, the Liberal Arts, and the Great Re-
cession, analyzed data on students anticipated majors from 2007 to 2011 re-
ported on the Freshman Survey of the Cooperative Institutional Research
Program, a national longitudinal study administered by researchers at UCLA.
The data are leading indicators of degrees awarded. Results were compared with
enrollment figures provided by the American Society for Engineering Education.
Since 2007, the number of engineering majors increased by 57.1 percent
and biology majors grew 28.2 percent. There were smaller increases for other
STEM fields: 11.1 percent in the physical sciences, 12.6 percent in mathematics,
and stagnation in computer science. The number of anticipated majors in biol-
ogy and engineering increased among both men and women.
Study authors Jerry Jacobs, a professor of sociology at the University of
Pennsylvania, and Linda Sax, a professor of education at UCLA, cautioned that
the growth in planned majors in biology and engineering does not fully answer
concerns about future work-force shortages in the STEM fields, and the recent
increases will probably ebb as the economy improves.
Gallup: Seven in 10 teachers not engaged in their work
Nearly 70 percent of U.S. teachers are not engaged in their jobs, according
to a recent survey by Gallup.
Gallup surveyed roughly 7,200 K-12 teachers in 2012 to distinguish highly
engaged workplaces from those in which employees were less engaged. About
one-third of U.S. teachers (31 percent) were engaged, meaning they were in-
volved in, enthusiastic about, and committed to their work, and that they know
the scope of their jobs and constantly look for new and better ways to achieve
outcomes.
A little more than half (56 percent) were not engaged, indicating they may
be satisfied with their jobs but are not emotionally connected to their workplaces
and are unlikely to devote much discretionary effort to their work. Thirteen per-
cent were actively disengaged, or dissatisfied with their workplaces and likely
to be spreading negativity to their coworkers.
The State of Americas Schools: The Path to Winning Again in Educa-
tion may be found at www.gallup.com.
Paul Heiser, Senior Research Analyst
Research briefs