Derry school district could adjust budget for ACA penalty
DERRY — Approximately $200,000 the Derry Cooperative School District had set aside in the 2013-14 budget for the Obamacare penalty could instead go to offsetting the tax rate in October, according to officials.
The Fiscal Advisory Committee is scheduled to meet with school officials tonight to discuss the Obamacare penalty funds and the proposed 2014-15 school district budget.
The committee has been meeting with school officials in recent weeks to discuss the proposed budget, which stands at $78,753,801.12, with the Obamacare penalty funds included, said Jane Simard, the school district's business manager. Last year's voter approved budget was $79,403,690.54.
The proposed budget can be changed only by the School Board, Simard said. The penalty funds could be moved to the reserve fund and used to offset the tax rate in October if approved by the School Board, Simard added.
Funds were set aside in this year's budget to cover the cost of penalties that would be assessed under Obamacare. A penalty would be applied if an employee purchases health care coverage and receives a subsidy under the program, said Katherine Kennedy, director of Human Resources for the school district.
The school district could potentially have to pay fines of $3,000 for each employee receiving a subsidy under the Obamacare penalty, Kennedy said. Penalties can be levied against not only the school district but other businesses with employees who receive subsidized insurance, she added.
"We put that in based on what our knowledge was at the time last year," Kennedy said.
But since the money was set aside last year, administrators have determined that many school district employees who might have qualified for subsidized insurance have proof of other coverage, such as through a spouse, and wouldn't be participating in the program. So, a large portion of the funds wouldn't be utilized, Kennedy said.
"We feel we are pretty safe not having as much set aside," Kennedy said.
A small portion of the approximately $200,000 might still be set aside in case the district has to pay any penalties, Simard said. There could still be from two to three employees receiving subsidies and the district might in turn be required to pay penalties for those employees, she said.
Tonight's meeting of the Fiscal Advisory Committee is scheduled to begin at 6:30 in the library of Gilbert H. Hood Middle School.