Insurance Scam Driving Wisconsin Union Debate

by Kyle Olson

Much of the current controversy in Wisconsin involves the impending loss of most collective bargaining privileges for state employees, including public school teachers.

The fact is that the Wisconsin Education Association Council, the largest teachers union in the state, has grossly abused that privilege for decades, resulting in the unnecessary siphoning of millions of dollars from Wisconsin public schools. Under current Wisconsin law, the identity of the insurance company that provides health coverage to school employees is a matter of collective bargaining in each school district.

In the majority of districts around the state, WEAC negotiators have used that law to pressure local school boards into purchasing coverage from WEA Trust, an insurance company established by and closely associated with the union.

WEA Trust offers very comprehensive health coverage, at a very high cost to schools. Most of the districts with the most expensive health premiums in the state are clients of WEA Trust. Most of the districts with the lowest premiums do business with other insurance carriers.

A few dozen districts have managed to dump WEA Trust insurance over the past few years, despite the protests of teachers and their union. Officials from many of those districts say they managed to save at least six figures their first year with a different carrier, and maintained steady rates in subsequent years, while still offering quality health coverage to employees.

Officials from other districts say they're also eager to dump WEA Trust coverage, but need their employees' anonymous claim histories from WEA Trust to share with other bidders. Several say they have never requested that information because they were told WEA Trust would punish them by pulling them out of local insurance pools, resulting in skyrocketing premiums.

Today many Wisconsin school boards consider themselves stuck with expensive WEA Trust health coverage, until state law is altered to take the identity of the insurance carrier off the collective bargaining table. Gov. Scott Walker's current legislative proposal would do just that, giving school boards the opportunity to freely shop for insurance and save millions of tax dollars for instructional purposes.

In fact, Gov. Walker recently cited WEA Trust as the #1 reason for collective bargaining reform.

Last year Education Action Group published a short, easy-to-read report on this topic, titled "A Crucial Challenge for Wisconsin Schools: Escaping the Shackles of WEA Trust Insurance." A copy of that report can be accessed by clicking here. The governor's campaign highlighted the report as evidence of the need for reform.

The union is saying this fight is about collective bargaining and the rights of its members. In reality, WEA Trust, under the umbrella of WEAC, stands to lose millions if the reform is passed, as our report points out.

The union's money and power stream would be hampered and it owes it to taxpayers and teachers to come clean about that.
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Kyle is founder and CEO of Education Action Group Foundation, a non-partisan non-profit organization with the goal of promoting sensible education reform.