FAIRMONT — The Fairmont School Board on Tuesday approved changing the district’s health insurance from Blue Cross Blue Shield to PEIP (Public Employee Insurance Plan) starting July 1.

The change comes following news that Blue Cross Blue Shield was going to increase insurance rates by 32 percent for this year.

Under state law, every two years a school district has to go out for a bid. PEIP and two Blue Cross Blue Shield plans entered bids and PEIP was the low bidder.

The district currently contributes $8,826, as per its contract with teachers, for a single coverage, which did not quite cover the plan, so teachers had to pay about $57 each month.

With the 32 percent increase, an additional $2,824 would be needed each month per person to cover the plan.

Who would pay to make up the difference — the school district or teachers — would need to be negotiated between the two sides. Teacher contracts are crafted every two years, with talks set to begin June 30.

“You can only spend a dollar once, you can’t pay it twice. If you pay it on insurance, you can’t pay it on salary. So the questions is do you want to pay it on salary or insurance?” said Superintendent Joe Brown.

In order to switch insurance companies, members of the teachers union have to vote. There are two basic unions with heath insurance: teachers and administrative assistants.

Sixty-seven teachers voted, with 53 in favor of switching to PEIP. Nine administrative assistants voted, with seven in favor of switching to PEIP. In order to make it official, the school board had to vote on it.

On average, PEIP has an average increase of 2 percent to 3 percent every year.

Brown said PEIP has 40,000 members in its system in Minnesota. Martin County recently voted to go on PEIP’s plan as well.

PEIP offers three separate plans with different deductibles. The most common PEIP plan costs $8,529.

Those educators and staff who are part of Southern Plains Educational Cooperative are also on Fairmont’s insurance, so it will change for Southern Plains employees as well.