Education Week - May 13, 2015 - 17

GOvernMent & POLItIcs
Cabinet Officials Offer Assurances After Baltimore Unrest
Education, Labor secretaries
discuss options for federal aid
By Alyson Klein
Can the federal government-including the U.S.
Department of Education-do anything to help
communities like Baltimore and Ferguson, Mo.,
recover from civil unrest spurred by fatal interactions
between citizens and police officers?
The short answer to that question appears to be
yes, at least according to policymakers who visited
Frederick Douglass High School in Baltimore last
week, including U.S. Secretary of Education Arne
Duncan, U.S. Secretary of Labor Thomas Perez, and
U.S. Rep. Elijah Cummings, D-Md.
But the longer answer-exactly what shape federal
help could take-is still emerging.
The policymakers traveled to the city in the aftermath
of rioting April 27 following the death earlier
in the month of Freddie Gray, 25, who suffered a
spinal injury while in police custody.
The Education Department, for example, is talking
to Baltimore about the process of applying for
funds available through Project School Emergency
Response to Violence program, or Project serv, intended
for communities recovering from traumatic
events. (Schools in Newtown, Conn., the site of the
2012 fatal mass shooting at an elementary school,
PAGE 19 >
PHOTO GALLERY: Visit the FullFrame photo blog to see
images from Noah Scialom, who covered the rioting
in Baltimore and its aftermath. He shares his thoughts
on the challenges and tensions of documenting
breaking news. http://fullframe.edweek.org
U.S. Secretary of Education Arne Duncan stands among students at a press conference at Frederick Douglass High School in Baltimore,
after a meeting with federal officials that touched on issues ranging from recent unrest in the city to job opportunities.
Unions Back Bill to Scrap Tax on High-Cost Health-Care Plans
By Stephen Sawchuk
& Jordan Moeny
Teachers' unions provided a lot of
the muscle to get the Affordable Care
Act passed in 2010-but now they're
supporting efforts to overturn one
portion of the law that stands to affect
some of their members: the law's
excise tax on high-cost employerprovided
health-care plans.
Both the American Federation of
Teachers and the National Education
Association have pledged their
support for legislation introduced
April 29 by Rep. Joe Courtney,
D-Conn., that would repeal the
tax, which goes into effect in 2018.
The Courtney bill has more than
70 cosponsors, including three
Republicans.
Rep. Frank Fuinta, R-N.H., introduced
a similar bill in February, cosponsored
by 31 Republicans.
The tax would require employers
to pay a penalty of 40 percent
on the amount by which the aggregate
cost of a plan exceeds a certain
threshold-$10,200 for individual
plans and $27,500 for family plans.
The thinking behind this tax was
that so-called "Cadillac" plans with
richer benefits made consumers less
responsive to the skyrocketing costs
of medical care.
In contract negotiations, public-sector
unions have sometimes favored
health-benefit increases, which aren't
taxable, over salary increases, which
are, thereby putting their members
at risk of exceeding the limits.
Although the tax would fall on employers'
shoulders, it stands to affect
teachers and school officials because
the costs would likely be passed on,
either through general budget par"
Over
time, more and more plans will cross that [high-cost] threshold ...
because the cost increase for insurance has exceeded the ... inflation rate."
MICHAEL PODGURSKY
University of Missouri
ing, which could affect school funding;
higher up-front health premiums; or
reduced health benefits. This would
also affect collective bargaining in
states that require it, since salaries
and benefits are dealt with there.
Shifting Views
During the law's drafting, unions
were among those that pushed to
carve out some exemptions in the
law for heavily unionized fields, including
for some medical workers
and firefighters. (Teachers weren't
among the exceptions.) They also
have especially cushy benefits.
Using a typical Blue Cross Blue
Shield plan, the report found that
geographic location sometimes led to
much higher premiums-$15,959 for
San Francisco compared to $10,214
for Huntington, W.Va. The analysis
did find, however, that benefit levels
do drive up average premium costs-
by 6.2 percent, the report estimates.
The report was written by Milliman,
a Tampa, Fla.,-based actuarialconsulting
organization and was
based on certain assumptions about
the costs of plans and the kind of
benefits included. Even so, the nea
Whether teachers are penalized is
based on factors outside of their
control, the union argues.
"Now that it's clear that the excise
tax will have arbitrary and negative
consequences, Congress must
repeal the excise tax to avoid inflicting
harm on American workers and
their families," said Kim Anderson,
the senior director of the nea's center
for advocacy and outreach, in a
statement.
The 1.5-million-member aft, in
supporting Rep. Courtney's bill,
argues that the excise tax compromises
the aca's original goals.
supported revisions pushing the date
of the tax back from 2013 to 2018.
A report commissioned by the 3
million-member nea and released in
April argued that factors like age, occupation,
and especially geographic
location often serve to drive up premium
costs, making some plans vulnerable
to the tax even if they don't
sees its conclusions as proof of the
damaging effects of the tax.
The nea's position is that it's
unfair that some teachers could
have a plan with modest benefits
and be affected by the excise tax,
while others working in a different
area could hold a generous plan
that doesn't reach the threshold.
"The Affordable Care Act was intended
to help all Americans access
high-quality health care without
depleting their paychecks and compromising
their ability to save for the
future," aft President Randi Weingarten
said in a statement.
Long-Term Outlook
Michael Podgursky, a professor of
economics at the University of Missouri
who specializes in the economics
of education, said that a "significant
number" of teachers have plans
that will be affected by the tax,
though he isn't certain exactly how
many. He also says that the number
of plans affected will only grow over
time.
"The problem with the Cadillac
tax is it will immediately hit some
teacher plans, but it's indexed to the
general rate of inflation, which is
very low," said Mr. Podgursky. "Over
time, more and more plans will cross
that threshold and become classified
as Cadillac because the cost increase
for insurance has exceeded the overall
inflation rate."
He said that one way districts
might avoid the tax is by offering
less-expensive plans, but increasing
salaries. However, since salaries
are also taxed, "that will lower the
relative after-tax compensation for
teachers," Mr. Podgursky said.
EDUCATION WEEK | May 13, 2015 | www.edweek.org | 17
Noah Scialom for Education Week

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Education Week - May 13, 2015

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