Orange County Public Schools’ proposed health insurance plan would “create undue financial hardship” for teachers, a special magistrate ruled Friday, recommending a compromise to break a months-long contract dispute between the school district and its teachers union.
In April, the district declared impasse in contract negotiations with the teachers union, saying it could not reach an agreement about health insurance. The district said that given rising insurance costs teachers needed to pay more for coverage and that without changes, OCPS would face a $145 million budget shortfall.
The local union, however, denounced the proposal as far too burdensome for employees and their families and said it would amount to a pay cut for OCPS’ more than 13,000 teachers.
The special magistrate — appointed to evaluate proposals from both sides and issue non-binding recommendations — suggested a middle-ground resolution, proposing some hikes to employee insurance costs but not the steeper ones OCPS suggested.
Magistrate James Mastriani’s proposal is closer to what the union wanted, however, stating the district proposal could create “instability in the workforce, especially on lower paid employees.”
The union accepted the magistrate’s recommendations early Monday morning, according to an email sent to teachers by the Orange County Classroom Teachers Association.
“These recommendations do not give us everything we sought, and accepting them was a difficult decision,” said Clinton McCracken, the union’s president. “But we have been willing to compromise since bargaining began. We are asking the district and School Board to demonstrate that same willingness,” McCracken said.
OCPS spokesperson Michael Ollendorff said district staff were “reviewing the recommendations and analyzing their total financial impact.”
The Orange County School Board, which has final say on employee contracts, has scheduled an impasse hearing for Wednesday, during which both the union and staff, if still not in agreement, can present their arguments.
Ollendorf said staff would present its views before the meeting.
The school board is not a neutral arbitrator in the contract dispute, however. It set the budget that provides parameters for staff negotiations with the union, and it hired the superintendent, whose staff bargains with union leaders. But sometimes, as happened in 2021, board members side at least partially with teachers and alter staff proposals.
The magistrate proposed capping health insurance premium increases at 20% and setting deductibles lower than the district suggested. OCPS proposed deductibles of $6,000 or $4,000 for family coverage and $3,000 or $2,000 for employees, depending on the insurance plan they suggested.
The magistrate recommended family deductibles of $1,800 or $1,500 for families and $900 or $750 for individuals.
The ruling also suggested a compromise between the district and union’s proposals on wage increases, recommending 2.5% increase for teachers rated “effective” teachers and 3.5% for “highly effective” teachers.
The district proposed raises of 1.98% and 2.65%, depending on rating, while the union asked for 3% and 4% respectively.
OCPS currently operates a “self-insured” employee benefits trust and contributes part of its budget to provide health insurance benefits to employees. The district blames rising healthcare costs nationwide for its proposed premium and deductible price hikes, claiming that without hiking employee contributions, the district’s insurance plans wouldn’t be financially sustainable.
Health insurance cost increases compound the district’s current financial struggles, driven largely by declining enrollment. In the last two years, OCPS has lost more than 12,000 students and closed seven school campuses. School districts are funded by the state on a per-pupil basis, meaning fewer students equates to less money for Orange County schools.
Because of declining enrollment, OCPS has slashed jobs and department budgets to save money. Last spring, OCPS cut 200 district-level positions. At the start of this school year, the district cut nearly 100 first-year teachers from classrooms.