As alternatives to creating another government bureaucracy, OSBA suggests the Governor and Oregon legislature explore:

Option A:

Establishing a statewide cap on health insurance premium rates – comparable to the rate paid under the government-run Public Employees Benefit Board (PEBB) – that school districts and ESDs can pay for health insurance.

Oregon districts may be better served if funding for their benefits is tied to the actual cost of a comparable set of benefits. Funding adjustments then would be more reflective of the actual costs associated with health care and the market that serves it. It would create the need to manage health care premium costs against a known benchmark such as the state employee plans while allowing the positive elements of marketplace competition and collective bargaining to continue.

A cap would contain costs and allow local collective bargaining to focus discussion on the most cost effective benefit plans. At the same time, it preserves local control over collective bargaining by allowing local boards and their union chapters to negotiate benefits within the financial framework established by the Oregon legislature.

Option B:

Designating an explicit portion of the school funding formula for benefits only. The amount could be directly tied to the amount being spent on state employee plans. The legislature could restrict the use of district funds of any kind above the budgeted threshold. Funding for retiree subsidies should also be considered in this arrangement.

Under this proposal districts would have a strong incentive to manage benefit dollars within a framework tied to a large program (state employees) perceived to be cost-effective. Funds intended for other school programs would not be shifted to maintain costly benefit programs.

OSBA-type plans would play an important role as a balancing tool as well as the competitive driver to assure access to common benefits and cost effective programs for all districts.

Included in either option:

Provide districts the option to purchase their health insurance benefit packages from the government-run Public Employees Benefit Board and prohibit districts from paying more than what is allowed through PEBB.