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February 21, 2011

Wisconsin Teachers Union owns health insurance company - they 'collectively bargained' for

Topics: Political News and commentaries

It turns out that collective bargaining is one of the ways that the Teacher's Union is stealing from the taxpayers of Wisconsin. A union-mandated high-cost health plan that is owned by the union is milking the taxpayers by charging premiums that far exceed market norms, and are doing so with impunity or apparent recourse.

From the report by the folks at the Education Act Group Foundation and MacIver Institute:

Here are a few simple, startling facts for anyone concerned about the financial condition of Wisconsin public schools.

WEA Trust, an insurance company established and closely associated with the Wisconsin Education Association Council (WEAC), siphons millions of crucial dollars from K-12 schools and their students every year.

WEA Trust has grown very fat on public school dollars, with a net worth of $316 million and a team of 12 administrators all receiving compensation packages worth six figures per year.

Sadly, this insurance swindle is endorsed by state law. We at Education Action Group believe it's time for the citizens of Wisconsin to demand that their school boards be allowed to freely shop for less expensive employee health insurance.

That's particularly important in the current economic environment, when schools have been forced to lay off teachers, curtail student programs, privatize services and, in some districts, seek permission from voters to exceed their local revenue caps.

The problem is state law, which makes the identity of a school district's employee health insurance carrier a topic of collective bargaining. That means school boards and local school employee unions must agree on the insurance company that will provide health coverage.

So most unions have traditionally come to the negotiating table demanding expensive WEA Trust insurance coverage, and the strategy has been effective. About 64 percent of Wisconsin's 426 districts carry WEA Trust insurance, despite its prohibitive costs.

Why do union employees demand WEA Trust coverage?

WEA Trust offers what is commonly known as the "Cadillac" of school employee health coverage. It earned that moniker for two very good reasons - the health coverage is very thorough, and the cost to local school districts is very high.

WEAC pressures its local union officials to stick with WEA Trust. One district administrator told us about a meeting where everyone present, including union employees, agreed that a non-WEA health plan would be better for the district. He said state WEAC representatives were present and argued in favor of WEA Trust, just because it's the union's insurance brand.

[...] Collective bargaining also adversely affects some districts that aren't covered by WEA Trust. The best recent example is the Milwaukee school district, where the deficit-plagued schoolboard tried to save $48 million and avoid hundreds of teacher layoffs last spring by switching from an expensive health plan to a lower-cost plan. The union said no, and the layoffs occurred.

Many observers agree that the best answer is to allow or force all public school employees into the state employee health insurance plan, which they say would be less expensive than WEA Trust, at least for most schools. Part of that strategy would be to take the identity of the insurance carrier off the collective bargaining table, so school boards would be free to join the state plan without union approval.

Other observers would simply set school boards free to seek whatever insurance coverage is best for their districts, whether it's part of the state plan or not.

Read the entire report here ...

Related: The worst generation?

Hat tip - Free Republic

Posted by Richard at February 21, 2011 3:28 PM

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