Education conference the good the bad and the ugly


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Education conference the good the bad and the ugly

  1. 1. The Good, The Bad, and The Ugly March 24, 2012 Educational Conference
  2. 2.  Reform Law Overview How Has Bargaining Changed? Preparing For Implementation Case Studies ◦ The Good – Chelsea ◦ The Bad – Chelmsford ◦ The Ugly – Salem Lesson’s Learned
  3. 3.  Continued rise in healthcare costs Massachusetts economy driven by the healthcare industry ◦ Educational institutions with hospital partners ◦ Robust Bio-Tech industry leading to new, innovative and costly procedures ◦ Healthcare access around every corner Lingering recession Decreased municipal revenues Steady diet of calls for reform to public employee benefits
  4. 4.  Massachusetts Municipal Association [MMA] wants to remove health insurance from collective bargaining Municipal leaders pressure Legislature for cost relief Governor Patrick wants to reduce municipal health care costs without taking insurance from collective bargaining Labor calling for protection of collective bargaining How did all these interests merge? ◦ Chapter 69 of the Acts of 2011 Municipal Health Insurance Reform
  5. 5.  Adds New Sections to MGL 32B – governing municipal health insurance; Sections 21 – 23 ◦ Section 21: Procedural language on adoption and implementation ◦ Section 22: Allows for unilateral implementation of copays and deductibles matching that of the GIC ◦ Section 23: Allow for the unilateral transfer into the GIC Detailed regulations provide a guideline for the process of implementation
  6. 6.  Bargaining is limited to 30-days Management is “Encouraged to bargain in good faith” – This is NOT traditional bargaining If agreement can’t be reached, municipal proposal shall be implemented by a 3-person review panel Union’s leverage is severely weakened Reform law has no mechanism for dispute resolution or impasse procedures
  7. 7.  Over 125 Cities, Town’s, and Regional School Districts have adopted the legislation since July 2011 Management is preparing and so should we! Contact your AFTMA Field Rep. for assistance Plan an organizing meeting with your local unions to become educated and prepare for the inevitable adoption of the law Watch local meeting agendas for health insurance discussions ◦ S.C. meetings ◦ Town/City councils ◦ Directors for collaborative schools
  8. 8. City’s Position: Delay adoption of reform law to allow for bargaining with unions Concluded that GIC would achieve the most savings - $1.6 Million to City Wanted to balance savings against the impact to employees and retireesUnion’s Position: Stay out of GIC Protect Retirees Multiple year protection against further changes
  9. 9. The Process Union coalition organized themselves and sought help from affiliate unions and counsel City and Union’s worked collaboratively to explore options outside GIC Reviewed costs and plan design options in area communities Union Coalition never wavered on their advocacy for retirees and lower wage workers
  10. 10. The Outcome 3-year Section 19 agreement – NO GIC Moved all coverage to Harvard Pilgrim with low copays Implemented hospital copayment with 100% reimbursement by the city Achieved additional savings by adjusting employee contributions (2.5% school-side and 5% city-side) Matched GIC Savings for city of $1.6 Million Grandfathered existing retiree contributions Partner with city to explore additional savings options Successor agreement language
  11. 11. Keys to Success Coalition got organized and educated early and met often Willingness by management to work with the unions Recognition by all that changes had to be made True bargaining – Give and Take from all the parties
  12. 12. Town Position: Adopt new reform and implement changes as quickly as possible Wanted changes in February rather than wait until end of the current fiscal year Chose to ignore signed MOA on health insurance changes made the year before Proposed GIC-Benchmark level copays and deductibles Union’s Position: Delay implementation of changes Request Town to honor Health Insurance MOA Provide mitigation for employees and retirees Multiple year protection against further changes
  13. 13. The Process Town had no interest in “bargaining” as we know it – viewed 30-day obligation to bargain as a courtesy. Coalition met regularly outside bargaining to prepare and become knowledgeable about the issues Attempts at compromise on plan design failed Reached agreement on the 29th day of the 30-day cycle
  14. 14. The Outcome 1 year, Section 23 agreement Adopted GIC-Level copays and deductibles Implemented Mitigation plan that provides a pre- loaded medical debit card to all subscribers ◦ More for Retirees, less for Active ◦ Leftover mitigation money will be distributed back to subscribers via a check Unions incorporated exploration language to review whether joining the GIC is reasonable Achieved an estimated savings of $1.5 Million to the Town and $800,000 for subscribers All subscribers will have lower premium costs
  15. 15. Why “Bad?” Management’s belief that legislation must be adopted and exercised to the fullest extent on behalf of the taxpayers Unwillingness to compromise on the part of the town No leverage for the union’s within the reform law Recognition that there was no way to avoid the implementation of GIC-level copays and deductibles
  16. 16. City’s Position: Force transfer to GIC Minimal mitigation Implemented reform law as close to GIC commitment deadline as possibleUnion’s Position: Sharing of the “savings” to lower premium costs for all subscribers Improve Retirees Protect members against impact of GIC plan designs (copays & deductibles)
  17. 17. The Process Union coalition organized and met before bargaining to prepare City proposal was driven by money, no empathy for impact to employees or retirees Coalitions use of experts at the table got an angry response from the city – We knew more about Healthcare than they did No commitment by City to bargain in “good faith” Union’s arguments and proposals were not heard by decision makers Remarks from the City during bargaining: “We will not entertain any proposals from the PEC” “You have no leverage, we hold all the cards” “Members will have to choose, CHANGE doctors and pay lower premiums or KEEP their doctors and pay more premium!”
  18. 18. The Outcome Transferred to GIC for three years 5% concession by city on PPO contributions Health Reimbursement Arrangement for some higher cost copays City agreed to pay HRA administrative expenses Employees and Retirees will be forced to pay higher premium costs unless selecting a limited network HMO City saves $1.5 Million and employees/retirees share only $122,000 in lower premiums!
  19. 19. Why “Ugly?” City appeared angry that coalition used knowledgeable representatives to bargain Coalitions requests to meet with the Mayor to discuss reasonable compromise was ignored Reform’s intent to lower everyone’s premium was ignored by the city Denial to accept proposals from PEC and treat the process as a negotiation No acknowledgment of significant changes in both plan design and contributions made by unions over the past three years
  20. 20.  Union Coalitions must be well prepared and informed Success can be achieved if management is willing to compromise and coalitions present a united front Eventually, every city and town will explore this law: ◦ Mass. Municipal Assoc. and Taxpayers Foundation are encouraging everyone to adopt this law as soon as possible – “get it done and move on”
  21. 21.  Engage other unions in discussion to prepare for the inevitable adoption of the law Use your resources – AFTMA field staff and published materials Understand your plans and costs Stay proactive instead of reactive