Purpose
In an age of escalating, and often uncontrolled, health care costs, the Lorain Education Association and the Lorain city Schools Board of Education agreed to a novel concept.  The creation of a health trust to provide health and welfare benefits to all Lorain City School employees.  The Trust assumes sole responsibility for providing health care benefits to Lorain City School District employees.  As such, it is responsible for the design of the health care plan, choice of health care providers, and management/payment of claims.  All questions with respect to benefits are decided solely by the Trust, and the Board of Education is to partially fund the Trust and reimburse to participants any unexpended and unclaimed funding at the close of the Trust year.

As part of the negotiated agreement, the Board of Education received a significant incentive to agree to the creation of the Trust.  Having faced years of escalating inflation for health care, the Board of Educations’ exposure to health care costs and inflation was significantly contained by the collectively bargained Trust.  In the event that inflation and health care utilization results in increased costs, the Board is obligated to increase its contribution over the base funding level only in an amount equal to fifty percent of medical inflation or the cost of living index whichever is greater.

To encourage the participants – school district employees and their families – to wisely use health care benefits, the Union and Board of Education agreed that if there were any cost savings during a benefit year, the Board of Education and the participants would share the savings equally.