Lorna Gerome (right) discusses health insurance and employee compensation with the Albemarle School Board and Board of Supervisors

Rising health insurance costs were at the forefront of discussion Wednesday between the Albemarle Board of Supervisors and the county School Board.

The conversation came during a meeting in which local government officials told the two boards to expect an increase of about 10 percent in health care costs next year.

To deal with this, the two boards are now considering a shift in health insurance offerings that would stop providing coverage to spouses who can receive those benefits elsewhere.

“We are seeing other employers in the area do this,” Albemarle’s human resources director, Lorna Gerome, said, citing the University of Virginia, UPS and LexisNexis as examples. “But it wouldn’t impact anyone who is self-employed or retired.”

If adopted, the move — which would take effect Oct 1, 2015 — would save Albemarle about $1 million.

Gerome said that about 33 percent of spouses left UVa’s health care plans following the decision, and that Albemarle would expect to see about 25 percent of spouses leave Albemarle’s books — though that estimate, Gerome said, is conservative.

In 2014, about 40 Albemarle employees who were covered by UVa enrolled for insurance through the county.

Staff also is awaiting future impacts of the Affordable Care Act. Under the act, beginning in 2018, individual health care plans over $10,200 per year are eligible for a 40 percent “Cadillac tax.” Albemarle’s current individual plan averages $8,349 per year.

School Board member Steve Koleszar said he’d like to see the School Board hold a separate work session on the issue.

In addition to health insurance premiums, the joint boards held their annual talk on compensation.

While the two bodies decided not to vote until they see County Executive Tom Foley’s five-year financial plan, they reached consensus on a possible salary increase of 1 percent to 3 percent for teachers and classified staff.

A 1 percent raise would come with an approximately $1.5 million price tag, while a 3 percent raise would cost $4.5 million, assistant county executive Bill Letteri said.

Last year, the county and the school division planned for a 2 percent salary increase, but ultimately lowered that figure to 1 percent in the face of a challenging budget year.

To make up for the lost increases, staff’s recommendation Wednesday called for a 3 percent increase for classified staff and a 2 percent bump for teachers.

But Supervisor Jane Dittmar said she was hesitant to agree on a number so early in the budgeting process.

School Board member Jason Buyaki agreed.

“It sets false expectations,” Buyaki said. “We have seven more months of budget work ahead of us before we can finalize the numbers.”

In 2000, Albemarle adopted a compensation strategy in which the county surveys surrounding localities to establish competitive market wages.

For classified, or non-teaching, staff, Albemarle’s strategy is to pay at the 50 percent level of the competitive market, or midway between the highest and lowest salaries.

For teachers, the strategy is to pay at the bottom of the top quartile, or the 75th percentile.

Supervisor Ken Boyd said that compensation strategies have changed a lot in the last 14 years.

“Maybe a small group should take a look at our strategy and see if it still makes sense,” Boyd said.

Koleszar agreed, but said he thought the current system worked well.

“We changed from the 50th percentile to the 75th because we saw our applicant pool drying up and we were hiring teachers we shouldn’t have,” he said.

Schools Superintendent Pam Moran said that any perception that teachers have been receiving raises is false.

“While on the surface it appears that our employees have gotten raises, in reality almost every one of those have been counterbalanced by actions that have removed them from their paychecks,” Moran said, noting that recent increases were due to issues such as rising Virginia Retirement System contribution mandates.

Gerome said the two boards also will be considering a new leave system that would offer one short- and long-term leave program to all employees.

The School Board is set to meet at 6:30 p.m. on Thursday, Oct 9 in Lane Auditorium of the County Office Building on McIntire Road.