LAS VEGAS – The Clark County Education Association is one union of many that got into the insurance business. The Indiana State Teachers Association faced mega losses a couple years ago when its ISTA Trust went belly up.
It looks like the CCEA’s Teachers Health Trust might be next.
From the Las Vegas Review-Journal:
The union-created health trust covering one of the largest employee groups in the state – Clark County’s 17,000 public school teachers – is hemorrhaging money and will be “belly up in 60 to 90 days.”
John Vellardita, executive director of the teachers union Clark County Education Association, made the announcement Tuesday in a closed union meeting. There, members received a spreadsheet detailing the dire straits facing their families’ insurance provider, the Teachers Health Trust, which has an annual revenue stream averaging $148 million.
The trust has lost more than $3.6 million since the fiscal year began July 1 because the cost of claims exceeds the trust’s revenue, according to the spreadsheet.
But the river of red ink stretches much further back.
The trust has stayed afloat the past two school years by dipping into and depleting what was a $7.23 million cash reserve. The trust would have bled its savings dry if not for a $5 million line of credit taken from the Bank of Nevada on Nov. 15, 2011, according to trust audits obtained from the Clark County School District and other sources. Less than $1 million of that credit remained in June.
“The Teachers Health Trust has drawn down its reserves to very critical levels,” Vellardita wrote in his report to members.