Administrators’ Option for Lifetime Health Benefits Restored

The Newport School Committee voted to approve one-year contracts for the school district’s principals and administrators during a special meeting on Thursday, Jan. 24. However, the vote was not without controversy, as a debate over a provision to reinstate lifetime health benefits for administrators and their immediate family ensued.

Because the administrator group is non-unionized and does not have a contract negotiating team like a teacher’s union, all contractual decisions are made final by select members of the School Committee. Also, unlike the contracts for unionized groups, which are for three years, administrator contracts are for one year only. Last year, the school committee eliminated lifetime health benefits from the administrator contracts. But this year, the lifetime health benefits were back on the table, causing frustration to some members of the committee.

This year’s contract stipulates that if administrators choose not to take the benefits, which are offered through Life Blue Cross, they will receive a one-time $4,000 or $2,000 in compensation, depending on how long they have worked for the school district. In addition, their salaries for the year would be increased by  two percent. Most administrators chose not to receive the lifetime health benefits, but instead opted to take the $4,000 or $2,000 compensation. Their reason: The option for lifetime benefits could be removed permanently once again the following year.  Two administrators with over 20 years of work experience in the school department received $4,000 in exchange for terminating their lifetime health benefits; while five received $2,000 instead of the same benefits. Another five people who were hired after 2005 were not given the option of lifetime health benefits, and therefore received no additional compensation.

With each contract being voted on individually at the meeting, eleven of the 13 administrator contracts were approved by a vote of 5-2. Thomas Phelan and Robert Leary opposed each of them, citing long-term cost. The twelfth contract was tabled for later discussion. The thirteenth, which was a contract for Paul Fagan, the school system’s Director of Property Services, was approved 4-3, with Rebecca Bolan joining Phelan and Leary in opposition.

Fagan, who has worked over 30 years for the school department, chose to keep his lifetime health benefits.

Leary said that allowing Fagan to keep the benefits will cost the city $449,000 over the next 26 years until Fagan is 85 years old, which is the age used by the city to calculate lifetime health benefits.

Additionally, Fagan’s wife is a retired para-educator, a classroom assistant teacher, who receives $6,000 a year for not enrolling in the school health plan because she is covered by her husband’s plan.

Leary and Phelan argued that the school system can’t afford to allow people to keep their lifetime health benefits: “Extended benefits are going to kill this district,” Phelan said. “If we don’t do something now, eventually the city and school system will go bankrupt.”

The school committee members who voted in favor of the contracts said that during last year’s administrator contract discussions, they removed the option of lifetime health benefits in an effort to set an example for the school district’s two union groups: the local teacher’s union, Teachers Association of Newport, and Council 94, which is comprised mainly of clerks, custodians, secretaries and para-educators.

But subsequent negotiations for the Teachers Association of Newport failed to remove lifetime health benefits from roughly 120 of Newport’s teachers in their new three-year contracts. In the Council 94 contract, 70 percent of employees lost their lifetime health benefits after contract negotiations, with about 12 people with over 15 years experience allowed to receive Medicare coverage paid for by the school system at age 65. The other 35 members of Council 94 will go on Medicare at age 65 without coverage from the school department.

Because members of the two unions were able to retain lifetime health benefits through their contracts, a majority of the school committee indicated that they felt it was fair that school administrators also be allowed to keep the benefits.

“The administrators did not have any say in losing their lifetime benefits last year,” said school committee member Jo Eva Gaines. “It was not negotiated … Had we been able to get rid of lifetime benefits from both Council 94 and the Teachers Association, then there wouldn’t have been any question.”

Leary argued that when the benefits were taken away from Council 94, its members received $4,000 or $2,000 increases in their base pay. He predicted that, by restoring lifetime health benefits to administrators, the School Committee is sending a message that will make negotiations with the two unions much more complicated for future contracts.

He also said that the reductions in benefits have lowered the school department’s health care liability cost from $70 to $62 million over the past two years.