School Districts Beware - Limit the Use of "Opt-Out" or Health Benefit "Waivers"

For many years, school districts have utilized “opt-out” or “waiver” payments to provide an incentive for employees to not take the health benefit plans offered by districts to its employees. These “waivers” were used most heavily when districts provided for 100% of the premiums for health benefit coverage. As the employees’ share for health benefit premiums has increased, these waiver payments have had less success or certainly had less significance that they once had in the overall health benefit planning for an employer.

“Opt-out” provisions are very popular with many employers. However, while they are not yet prohibited, they will come under additional scrutiny due to the new "temporary high risk insurance pool" funded by the federal government, which will remain in existence until January 1, 2014. Basically, the high risk insurance pool will cover those individuals who have high risk claims and have not had health insurance for a period of at least 6 months. It is expected that the government will attempt to recoup any amounts it pays for high risk claims from employers that incentives their employees not to enroll in employer-provided coverage. Therefore, while it is not illegal to provide an opt-out bonus to its employees, the district faces some risk in continuing to do so.

Some Clarification Provided on Duty of Intermediate Units to fund Typical Pre-School

There has been an ongoing dispute in Pennsylvania over when, if at all, the provider of early interventions services, typically an intermediate unit, is require to fund the placement for a student in a typical preschool.  A recent Hearing Officer decision on this issue helps to provide some guidance on this issue, although the line of when such services are required still remains unclear. 

The first case to decide this issue, B.D., ODR No. 00062-0910 AS (SEA Pa. 2010), found that the student in that case required preschool in order to meet the student’s special education needs, but appeared to suggest a broader requirement to fund such placements despite the clear direction by the Pennsylvania Commonwealth Court that no such duty exists. The more recent case of J.D., ODR No. 01524-1011 AS (SEA Pa. 2011) addresses this issue more directly by explaining that while such programs are clearly beneficial for all children, disabled or not, generally there is no duty on the part of intermediate units to fund such placements.  While the J.D. decision suggests that in some cases a student’s needs might require a typical pre-school, the decision puts the burden on the parents to establish the same.

Both decisions are a warning to intermediate units and other providers of early intervention services to carefully draft IEP’s and identify the needs of early intervention students or run the risk of being responsible for funding a typical preschool.