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The Anderson County school district is expected to foot a $183,479 bill to cover a portion of a debt-ridden insurance trust’s $60 million deficit.
It’s been at least 10 years since the district last worked with Kentucky School Boards Insurance Trust or KSBIT to provide accident insurance and compensation for sick and injured employees, among other services.
But Anderson County, along with about 174 school districts as well as public and private Kentucky universities, are now finding they need to pay back fees to cover KSBIT’s losses.
KSBIT, formed in 1978, announced early this year that the agency’s losses had exceeded what KSBIT had in premium contributions needed to pay for their clients’ insurance claims.
Even if a school district were not a current customer with KSBIT when it dissolved this year, any member in the Workers’ Compensation pool between 1990 and 2011 or involved in the Property and Liability pool between 1993 and 2012 would be expected to cover losses, according to a KSBIT memo from early February.
Finance Officer Nick Clark said the last claim filed by the Anderson County school district with KSBIT had to be around 2003.
The school board has three options for payment plans, Clark said.
Pay the $183,479 in full, over 10 years or over 20 years.
Clark said right now, the 20-year payment plan looks to be a good option for the board, which allows the board to submit a lower payment per year to KSBIT.
However, the 20-year payment plan may include about $2,000 in additional interest per year over those two decades, Clark said.
The finance officer said the payment amounts estimated by KSBIT have not been finalized, and once they are, he will bring the matter to the school board to decide a payment plan.
“There’s still a whole lot of questions that we have as far as this goes,” Clark said.
KSBIT is expected to finalize assessment amounts for school districts in March.
Though not an unanticipated expense for 2013, Clark said the KSBIT payment should not have any significant effect on the budget, or affect any district programs.