INDIANAPOLIS_The Indiana State Teachers Association and the National Education Association say they'll scrape up enough cash to pay 650 people receiving long-term disability benefits from the state union's troubled insurance trust.

ISTA previously said it didn't have enough money to cover the long-term disability claims, which could cost $45 million to $65 million over the next 15 to 20 years. But ISTA and NEA officials said Tuesday that they will find the money, although they didn't have specifics on exactly where the cash will come from.

ISTA union dues for Indiana teachers _ currently set at $449 a year _ could go up. The union could lay off some of its 150 employees, or consider selling its office building across from the Indiana Statehouse.

"Everything is on the table," said ISTA President Nate Schnellenberger.

ISTA's Representative Assembly will meet June 20 and could make decisions about raising dues or reducing the budget.

However, NEA members in other states won't be affected and dues in other states will not rise because of Indiana's problem, said NEA president Dennis Van Roekel, who was in Indianapolis Monday to reassure Indiana members that long-term disability claims would be paid.

The NEA has more than 3.2 million members nationwide. Indiana is the first state affiliate to request a trusteeship from the NEA, Van Roekel said, allowing the national group to take over operations as investigators determine whether insurance trust managers did something more than make risky investments.

The state union will have to repay NEA over the long term, but the national union wants its state affiliates to succeed, Van Roekel said.

"The whole purpose of having a union is that we all come together," he said. "When one is in need, we provide the necessary assistance."

Long-term disability payments would cost about $8.5 million for the first year, said Trustee Ed Sullivan, and that yearly figure would decline over time. It's unclear how much the NEA and ISTA will each pay.

"I'm not certain yet on how we'll do it, but we know that the financial commitment's there and the resources are there to make sure the money is given to the trust," Sullivan said.


It will be much easier for NEA, with its budget of about $355 million, to absorb the costs than for ISTA, which has an annual budget of $20 million to $22 million and represents about 50,000 teachers and others.

But Schnellenberger said ISTA would emerge a stronger organization after getting out of the insurance game.

ISTA's insurance trust had been looking for an insurance carrier to take over its long-term disability plan starting Aug. 1. But no company was interested in taking over the program, officials said Monday, so school corporations will have to find their own long-term disability coverage. About 90 school districts used the long-term disability plan offered through ISTA's Insurance Trust, although that number has likely decreased as school districts have sought new plans.

The 650 people already receiving long-term disability claims will continue to get paid through the trust because of ISTA and the NEA contributions.

"No one receiving benefits from the trust has ever missed a check," Schnellenberger said. "Because of this partnership, no one will."

ISTA has already worked out a deal with UnitedHealthcare to take over its medical health insurance plan, which was in better financial shape than the long-term disability plan.

The Indiana Department of Insurance says ISTA's insurance trust has a net worth of negative $67 million, and that too much was put in private investments that are not publicly traded. ISTA Deputy Director Dan Clark said last month that allegations had been made of "inappropriate fees and inappropriate trading as well as inappropriate investments."

The Indiana secretary of state's office has declined to say whether it is investigating, but Clark says the office had issued subpoenas for two former ISTA employees who made decisions about the trust. One has since retired and another resigned, although the reasons behind the personnel changes were unclear. Investment firm Morgan Stanley has said it has handled ISTA's trust since 2008 and that it would fully cooperate with investigators.

ISTA also is investigating and said it could take legal action against those involved with managing the trust.