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California School Fiscal Services

Providing comprehensive business office and consulting services to K-12 traditional schools and charters

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Planning for Affordable-Care Act (ACA) - Author: Shariq Khan

Posted on July 12, 2014 at 10:20 AM

One of the items in Alameda Unified’s 14-15 budget is $300K for potential penalties related to the Affordable- Care Act. It was difficult to come up with an accurate and reliable amount without any historical trends and lack of data. To make an educated guess, the District audited the 2013 payroll and identified employees who contributed more than 9.5% of their earnings to cover the cost of healthcare. Most of these employees were part of the Paraprofessional group and some substitute employees. We conducted an in house analysis to determine the District’s liability in case all employees in this group do join the Health Exchange and trigger a penalty. The estimated cost of penalties is $600K. Fiscal Office and Executive Management felt comfortable with setting aside $300K. To put it into perspective, Alameda Unified’s total cost of healthcare benefits is $3.7M annually.

 

The amount is clearly identified in the assumptions section of the budget presentation. The Superintendent also brought it up in her weekly Board briefing. Bargaining units were also briefed on the issue. Alameda Unified is with PERS for health benefits and as of right now PERS has not given any indications of offering less expensive plans. I am not sure if the long term solution will be to simply pay the penalty or adjust salary schedules to make the lowest available plan affordable for all employees.

Categories: Affordable Care Act

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