Combing Contracts: insurance buy-backs

PROVIDENCE, R.I. (WPRI) - According to state figures, health insurance for public education workers costs taxpayers $225 million per year. To save money the governor wants to make some dramatic changes.

One of those changes could be shrinking health insurance "buy-backs." That's where a teacher gets a big check for opting out of health insurance. It's part of the intense health insurance battle playing out right now.

It's all about leverage. The governor wants to take more items off the bargaining table, like "buy-backs," when it comes time to hammer out a new contract. It’s a proposal that does not sit well with the unions.

The teacher contract battle in East Providence has become the poster child for "stalemate." A big issue at the negotiating table is the cost of health insurance and so-called "buy backs." The Townie teacher's union is fighting the school committee's new contract that calls for the elimination of "buy-backs" altogether.

"Any number of aspects in health insurance can become a crucial element in the bargaining," said David Abbott of the Rhode Island Department of Education.

Abbott said he also believes the governor's unified healthcare plan for teachers would minimize buy-backs across the board.

"We just can't afford the level of benefits and services that we've had," he said.

After combing teacher contracts for all 36 school districts, Target 12 crunched the numbers. Here are some of the most generous buy-back offers we found.

-Newport teachers can get up to a $5,800 check to opt-out of coverage.

-West Warwick teachers can get $5,500 per family plan.

-Smithfield teachers can get a $4,500 check every year.

But that trend is changing. In fact, Cranston schools did away with "buy-backs" entirely. A move the unions don't agree with.

"I think providing a modest cash incentive is a reasonable opportunity and unions give to the employees by providing these waiver payments," said James Parisi of the Rhode Island Federation of Teachers.

Parisi believes that buy-backs are a good deal for towns. But critics argue workers make health insurance decisions based on coverage, not a fat check.

When asked if it's like free money is being handed out, Parisi responded, "Like I said there is cost savings for the employer that makes it a legitimate thing to provide for our employees."

The governor's plan also means teachers have to pay a 25 percent co-share for health insurance. That's a big change from most current contracts.

What towns have the best health insurance deals? Click here to read part two of Combing Contracts.