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Hamilton County Department of Education headquarters

Policy from President Barack Obama's administration is hitting the Hamilton County Board of Education's pocketbook in multiple ways this year.

School officials are bracing for increases in health insurance costs as the specifics of the Affordable Care Act continue to trickle down. And the Healthy, Hunger-Free Kids Act is hurting the school nutrition department's balance sheet as fewer students opt in for the healthier meals. Hamilton County Board of Education members heard of both concerns at a budget workshop Thursday evening.

In an attempt to curb rising childhood obesity rates, the new school lunch law limits how much and what kind of grains can be served, increases the daily servings of fruits and vegetables and puts strict limits on calories, salt, fats and sugars in all school lunch programs regulated by the United States Department of Agriculture.

The first major reforms were implemented this school year with more changes planned to roll out through 2022. Locally, the reforms have cost the district cash as fewer students buy school lunches. Director of School Nutrition Carolyn Childs said the program will take about $100,000 from its own reserve funds to fill in the gap of lost revenue this year.

School nutrition maintains its own budget separate from the school system's general fund. And the department's budget next year is projected to shrink from this year's $20.2 million to about $19.8 million. The department budgeted nearly $4 million in lunch payments this year, though next year that figure is projected closer to $2.8 million.

Childs said the department has cut or reallocated staff and is working to better manage inventories of food to keep costs down.

"We're doing everything we possibly can to stop that bleeding," she said.

In a move to balance the weight of increased costs, the school system likely will increase employee health care costs for dependent coverage next year. Administrators are recommending that employees pay an additional $75 per month, or $34.62 per paycheck. Premiums on the district's two health plans, an HMO and a PPO, currently range from $100 a month for an individual to $358 for a family. With its extensive coverage, administrators said the plan is one of the most generous around.

"It's not a good plan. It's a great plan," said board member Jonathan Welch, whose family is covered under the plan because of his wife's employment with the district.

The school system, which employs about 6,000 people, spends about $50 million annually on health insurance costs, officials said. Including dependents, about 10,000 people are covered by one of the system's self-insured plans.

"It's a Rolls-Royce plan," said Leon Rash, director of purchasing.

Superintendent Rick Smith said administrators will continue to review the effects of health care reform and search for ways to find savings over the next year. Board member Rhonda Thurman said she wants to see teachers pick up more of the costs of the extensive coverage and health care reform.

"If this is what they want, they're going to have to pay for it," she said. "We're going to have to get serious about it."

Contact staff writer Kevin Hardy at khardy@timesfree or 423-757-6249.