NEWPORT, Maine — The Maine Education Association Benefits Trust has stepped in after budget struggles forced the Newport-area school district to leave its health insurance premiums unpaid for several months.
In a statement sent to school board members and educators in RSU 19 on Thursday, the Maine Education Association Benefits Trust, an agency that oversees health insurance plans for about 65,000 public school employees across the state, said it was recently notified by Anthem that RSU 19 had not paid its health insurance premiums since October 2015.
“As a result, Anthem notified [the Maine Education Association Benefits Trust] that beginning on Monday, Feb. 15, employee claims for medical services and prescriptions were in danger of not being paid unless the district made a premium payment,” the Maine Education Association Benefits Trust wrote.
To avoid risking unpaid employee claims, the Maine Education Association Benefits Trust says it helped broker a deal in which Anthem committed to paying claims if the district paid its October premium by Feb. 29, and made arrangements to pay the rest.
RSU 19 includes Newport and seven surrounding communities.
The district’s interim superintendent, Ray Freve, said RSU 19 notified Anthem in advance that it wouldn’t be paying its bills and has been working with the insurance company as it tries to sort out its financial struggles. Freve said some other bills, such as oil, have gone unpaid, but the companies have been largely cooperative.
“The district has had a cash flow problem in recent years,” said Freve, who took over the interim superintendent role in December. “We’ve had to watch what we’re paying.”
Freve said the district expected $23 million in revenue this year, which turned out to be a “severe overestimate.” Freve said revenue is short about $295,000, which has forced the district to take care in where it spends money by reducing overtime and becoming delinquent on some bills.
Meanwhile, the district is trying to garner support for a construction project to overhaul the district’s school facilities. The district wants to build a replacement for Nokomis High School, bringing the district’s middle schoolers along as well, but in a separate part of the building. The district’s middle schools would be renovated to house the K-5 students.
The state has approved $69 million for construction, renovations and the demolition of the high school. Residents will face a referendum question asking whether they want to accept that funding. If it doesn’t go through, the district still needs to replace boilers and roofs at its schools, and could face renovations of $14 million, which would have to come from local towns and taxpayers rather than the state, Freve said.
Meanwhile, the district will continue to grapple with financial issues.
RSU 19 is in the middle of its budget planning for the next fiscal year and hopes to get itself on the right track, so it can stop using “Band-Aids,” Freve said. That could be difficult, as the district is projected to lose $46,000 in state subsidy, according to initial estimates released by the state late last month.
“Sooner or later, we’ll pull it together,” Freve said.
Follow Nick McCrea on Twitter at @nmccrea213.