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For Immediate Release

Date: 03/25/11

Rep. Ralph Sarty Moves Forward with Bill to Let School Districts Self-Insure

AUGUSTA - State Rep. Ralph Sarty has received formal language for legislation to give school districts the flexibility to self-insure. The goal, he says, is to allow schools the option to obtain less costly health insurance policies during this time of financial pressure.

The bill - An Act to Allow School Administrative Units the Option to Seek Less Expensive Health Insurance Alternatives - has been published by the Revisor of Statutes and is expected to soon be assigned a Legislative Document (LD) number and proceed to the committee of jurisdiction.

"I've spoken with numerous school superintendents, and they are quite intrigued by this idea," said Rep. Sarty, a third-term legislator. "Schools are under financial pressure right now, and health insurance for teachers is a costly item. Superintendents are very interested in the idea of saving money by self-insuring. They see it as a way of preserving positions for teachers."

Rep. Sarty's proposal consists of three key provisions. First, it would allow school administrative units to offer group self-insurance health programs and to enter into cooperative agreements with other school units and/or municipalities to provide the programs.

Second, the bill provides that school administrative units may arrange for and offer a choice of optional health and/or dental insurance plans to employees and their families that may vary in benefit levels and price.

Third, the bill requires insurers, health maintenance organizations and non-profit hospital or medical service organizations to provide information concerning a school unit's claims history as a member covered under a group policy. Municipalities would enjoy the same right to receive experience and claims records from group policy insurers.

"School administrators are asking for options," Rep. Sarty said. "They are not satisfied with the current one-contract arrangement through Maine Education Association and Anthem. Many of them believe they could get more reasonable rates, as well as an expanded range of option, by self-insuring. The Maine Municipal Association plan, for example, offers five different choices with varying benefits and premium costs.

"At the very least," he added, "they want the flexibility to explore the possibility of saving money. This bill does not require school districts to do anything. It simply gives them a more clearly defined option to look for savings during a time of extreme financial pressure."

The legislation stipulates that any self-insurance plan covering school units must adhere to traditional insurance standards with regard to financial reserves, actuarial analysis and legal technicalities. The plan would be required to file audited financial statements, certified by an independent CPA, with the state superintendent of insurance. ###

Jay Finegan
Maine House Republicans
Tel: (207) 287-1445