One of the big challenges of operating a charter school is balancing priorities in conflict. You need to keep your benefit costs under control while offering a competitive total compensation package that attracts great employees. There is no single solution to keep benefit costs down. Reducing overall health and welfare spending requires understanding the true costs. From there, you can apply the right tools for lowering your benefit expenses.
Other postemployment benefits (OPEB) – encompassing health and welfare benefits provided to current and future retirees – create significant current expenses plus long-term liabilities that grow larger every year. Public agency accounting requirements now mean these costs aren’t just on paper; they hit today’s bottom line. However, OPEB may also be a great opportunity to significantly decrease spending. Through strategic planning and cooperation with both employees and retirees, millions of dollars of OPEB liabilities can be successfully eliminated.
But can anything be done to lower health care costs for active employees? Certainly, there are cost-shifting approaches to lower monthly premiums. But increasing their out-of-pocket costs is not going to be popular in this time of economic uncertainty. Medical cost trends over subsequent years will erase any savings from higher deductibles or copayments. Attacking long-term benefit expenses takes strategies that decrease costs and utilization and provide incentives for employees to participate effectively in these strategies.
"Understand the true costs; then you can apply the right tools."