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VSBA urges overhaul of school employee health benefits to rein in rising costs
Summary
The Vermont School Boards Association told lawmakers that rising health-care costs for school employees — premiums up about 125% from FY18 to FY25 and current costs exceeding $300 million annually — threaten district budgets and urged changes to the Commission on Public School Employee Health Benefits, a single statewide HRA administrator, caps phased in over time, and expanded arbitration criteria.
Sue Cyglowski, executive director of the Vermont School Boards Association, told the House Education committee the association’s first legislative priority is reforming the Commission on Public School Employee Health Benefits to address rapidly rising health-care costs that she said now exceed $300 million annually and have increased far faster than inflation.
Cyglowski said the most common plans’ premiums have "more than doubled… rising approximately 125% from FY18 to FY25," while the consumer price index increased about 32% in the same period. She warned that, if current trends continue, health-care spending could comprise "upwards of 20% of district budgets" (she said districts are currently "over 15%"), limiting resources available for classroom instruction, student supports, staffing and facility maintenance.
To address the trend, VSBA proposed several reforms: include independent neutral members on the benefits commission to focus on solutions rather than adversarial negotiations; cap the total value of health benefits with thoughtful phasing; require a single statewide HRA administrator to reduce unnecessary variation and cost; expand arbitration criteria to include comparability to Vermont Health Connect plans and the economic impact on education spending; and allow blended arbitration outcomes rather than winner-take-all awards. Cyglowski said specific bill language will be introduced soon and pointed to prior work, including a 2021 bill by Chair Conlon.
On education funding generally, Cyglowski said a foundation formula can meet VSBA criteria but that details such as base funding levels and the annual inflator matter. She called for rigorous, data-driven modeling of effects on districts and taxpayers, phased implementation to limit winners and losers, and predictable funding for mental-health services and school facility needs (including remediation for PCBs).
Committee members cautioned that some cost drivers are national in scope and may not be fully solvable at the state level. Cyglowski said there are options within state control and that VSBA is working on scenarios with "real numbers" to show possibilities if bargaining processes change.
The testimony concluded with a request that the committee consider VSBA’s recommendations in forthcoming bills and to review the association’s supporting analyses.
