Insurance change may prompt exodus in education

Published 12:00 am Tuesday, October 4, 2011

As many as 55 teachers and support personnel in Covington County could retire early, and in the middle of this school year, in reaction to a new state law that increases retiree medical insurance premiums beginning Jan. 1.

The hike in prices comes as part of the recently passed Public Education Employee’s Health Insurance Plan, which will significantly raise premiums between retirement and age 65 for employees who are eligible to retire, but choose not to before the deadline. For those who retire after Jan. 1, there will be a 2 percent sliding scale insurance increase for five years or until the retiree is eligible for Medicare,

Those affected must file paperwork by the end of this month, if they plan to retire Dec. 1.

Statewide, some 10,000 teachers and support personnel in K-12 and the two-year college system could choose to retire in Dec.1, in order to avoid the high medical costs.

Locally, Andalusia City Schools Superintendent Ted Watson said there are about 20 employees in the school system who have 25 or more years experience.

“What we have here is a quagmire,” he said. “We have a variety of situations. You have teachers who have 25 years of experience, but are not close to 65. They have to weigh whether or not they can afford to live off of what their retirement will be. We have some who are really close to 65, and then we have some who are over 65. I’m sure that most of them will retire. But it’s not so cut and dry. For some ,they are going have to pay tens of thousands of dollars extra in 10 years.”

Superintendent Michael Smithart said for Opp City Schools there are two support personnel who are electing to retire. Others are considering it, but have not submitted the paperwork.

Covington County Schools Superintendent Terry Holley estimated the county system has 20 to 25 employees who are eligible, but said he isn’t sure how many will actually take advantage of the opportunity to retire and secure lower rates.

On Wednesday and Thursday, Holley has invited the Retirement Systems of Alabama to the school board to hold a clinic.

“Anyone who is thinking about retirement needs to talk to them on an individual basis,” he said. “I’m available to talk as well, and we’ve been including Social Security in on this because it does affect that, too.”

“It’s a change,” he said of the new law. “Only the people who can retire have a chance to take advantage of this and fulfill their destiny. I do feel we will have some people look at this and make their decision.”

Since retirements begin on the first day of the month, Dec. 1 is the latest an education employee is eligible to retire and not pay higher premiums. Additionally, retirement requires a minimum 30-day advance notice, so those wanting to retire must submit paperwork by Nov. 1.

If Gov. Robert Bentley calls a special legislative session in November, the effective date of the PEEHIP sliding scale law could be pushed to the summer of 2012 to avoided potential mass retirement for eligible teachers.

For now, the superintendents say they are just “waiting to see” what happens.