The CCEA is not the first teachers union to form its own insurance company and pressure local school boards into purchasing that company’s overpriced coverage.
The Maine Education Association, the state’s largest teachers union, established its own insurance entity, the Maine Education Association Benefits Trust, in 1993.
The Benefits Trust “ facilitates” the purchase of employee health insurance for Maine’s public schools, essentially selling them coverage provided by the state’s largest carrier, Anthem Blue Cross/Blue Shield.
Nearly every school district in the state has been lulled into joining this system over the years, according to officials in several Maine school districts. The Benefits Trust/Anthem scam, which discourages outside competition, has driven insurance prices through the roof for Maine schools.
The Michigan Education Association owns its own insurance company, called the Michigan Education Special Services Association (MESSA). For years local union negotiators have pressedschool boards to purchase MESSA employee health insurance, despite its high cost.
As a result, roughly half of the districts in the state carry some form of MESSA insurance, and many are struggling with the continually rising cost of premiums. As in Maine, many Michigan school officials have accused MESSA of refusing to provide insurance claim records that are necessary to attract bids from competitors.
The Michigan Education Association also receives annual kickbacks from MESSA, in exchange for effective representation at the school board bargaining table. In 2009, MESSA reported net assets of $259 million. In 2010, MESSA shared $5 million with the MEA.
The Wisconsin Education Association Council also created an insurance entity, called WEA Trust, several decades ago. For years local union negotiators pressed school boards to purchase employee health insurance from WEA Trust, often at a very high price.
At one point, about three-quarters of the state’s school districts purchased insurance from WEA Trust, helping the union-affiliated insurance company build assets worth $674 million in 2008, according to government records.
EAG published a 2010 analysis of WEA Trust, which revealed that most of the school districts in the state with the highest insurance costs are clients of WEA Trust. Many school administrators said it was very difficult to convince their local unions to allow them to seek bids for less expensive health coverage.
All three of those union-affiliated insurance companies have attracted close scrutiny since a wave of reform-minded lawmakers were elected in November 2010.
Lawmakers in Maine, Wisconsin and Michigan have recently taken steps to give school districts more freedom to accept competitive bids for employee health insurance, thereby ending or at least eroding the expensive monopoly held by union-affiliated insurance companies.
In Clark County, that job is being left to an arbitrator. All the students and taxpayers can do is hope the arbitrator does the right thing for the school district and community, even if that angers the self-serving union.