Unions propose compromise health plan to cut costs

A coalition of labor unions representing teachers, fire fighters, police, snowplow operators and other school and municipal employees throughout the Commonwealth announced its support March 7 for a compromise plan to reduce local health care costs while preserving collective bargaining rights. The Public Employees’ Municipal Health Coalition cited the difficult economic conditions in Massachusetts and the coalition’s commitment to saving jobs and preserving crucial local services as the reasons for its willingness to negotiate changes that will save municipalities tens of millions of dollars each year.

The State House announcement came just one day before a legislative hearing on the issue and is designed to break a logjam that has lasted for several years by striking a balance between those who want no further changes to the system and those who want municipal administrators to have unilateral control over employee health insurance benefits

Unions signing on to the plan are:

AFSCME Council 93
American Federation of Teachers Massachusetts
Massachusetts AFL-CIO
Massachusetts Laborers Public Employee Council of Massachusetts and Northern New England Laborers District Council
Massachusetts Municipal Police Coalition
Massachusetts Police Association
Massachusetts Teachers Association
Painters & Allied Trades District Council #35
Professional Fire Fighters of Massachusetts
SEIU – Local 888
United Steelworkers Sub-district 3


MTA President Paul Toner answers questions at the March 7 State House press conference.

“The unions have been at the table for the past seven years seeking a solution to this problem,” said MTA President Paul Toner. “We call on municipal managers to join us in our effort to achieve a reasonable compromise. We are willing to make sacrifices to save jobs and vital services for our communities and our students. Like the public employees in Wisconsin, however, we will fight hard against any proposal to undermine our collective bargaining rights.”

[MTA President Paul Toner's Remarks]

[Watch Toner's remarks on YouTube]

The coalition’s plan, like a proposal released earlier this year by Governor Deval Patrick, calls for establishing a benchmark level for health insurance spending that municipalities and employees would have to reach. Expedited bargaining over the changes would occur, with all of the unions and retiree representatives in a municipality negotiating as a team. (This is called Section 19 bargaining after the provision in state law that permits it.)

The needed savings could be achieved by negotiating to enter the state Group Insurance Commission or by negotiating plan design changes to reduce premiums, such as increasing co-payments and deductibles.

The proposal, which is not yet in bill form, would also require that some of the savings go to employees.

“Everyone understands that achieving savings on health insurance to protect public services is a necessity in these tough times,” said Robert Haynes, president of the Massachusetts AFL-CIO. “Achieving savings and collective bargaining are not mutually exclusive. Workers who have long had rights to negotiate over health insurance should maintain those rights to negotiate how savings are achieved.”

Savings could be shared by establishing municipal Health Reimbursement Accounts through which employees with high medical costs would be reimbursed for a portion of their expenses. Some municipalities already have HRAs, although these accounts currently are not permitted for state employees or for municipalities that participate in the GIC.

“We are very concerned about employees and their family members who have chronic medical conditions and therefore have very high out-of-pocket costs,” said Edward Kelly, president of the Professional Firefighters of Massachusetts. “These employees need a safety net. That’s the whole point of insurance.”

Thomas Gosnell, president of AFT Massachusetts, stated, “After lengthy discussion, we believe that our proposal will enable cities and towns to obtain substantial savings without undercutting collective bargaining.”

The coalition proposal would set limits on how long the municipality and unions have to bargain the changes under Section 19. If no resolution was reached in that time, the issue would go to a speedy dispute-resolution process.

“The default solution can’t be that the municipality gets the final word,” said Anthony Caso, executive director of AFSCME Council 93. “If that were the case, city and town officials would have no incentive to reach an agreement through bargaining.”

The plan also calls for all Medicare-eligible retirees to enroll in Medicare. Under current law, that requirement only takes effect if a city or town has voted for the mandate, and a number have not.

“Cities and towns can save millions of dollars a year by having retirees join Medicare,” said Toner. “Section 19 bargaining would again be used to make sure that retirees receive the supplemental Medicare insurance to which they are entitled. Even with some of the supplemental insurance costs covered, municipalities save a lot of money when the federal Medicare system picks up most of the health care tab.”

The municipal health care issue has been under discussion since 2004. In 2007, a law was passed under which municipalities would, for the first time, be permitted to participate in the GIC. Since then, 31 cities, towns and other governmental entities have joined. Last year, however, the GIC took the rare step of making mid-year plan design changes, increasing co-payments and adding a $250-per-person and $750-per-family deductible to all of its plans. These mid-year changes upset many employees who had just voted to join the GIC and were a factor in discouraging more municipalities from joining.

Under the union proposal, mid-year plan design changes at the GIC would not be allowed, and the GIC would have to have greater employee representation.

The coalition’s proposal for a balanced process stands in contrast to a bill filed by the Massachusetts Municipal Association over the past several years. The MMA plan would give municipal leaders the right to make unilateral plan design changes in line with the GIC without collective bargaining. Savings would not have to be shared.

“The MMA plan is unacceptable,” said Haynes. “There is no fairness when all the power is on the side of management – when collective bargaining is turned into collective begging. We cannot be part of the solution if we’re not part of the process. We will continue to fight the MMA proposal, while at the same time working with state and local officials to attack the root of the problem: excessively high health care costs that continue to grow.”

SEIU-Local 888 President Bruce Boccardy concurred, stating, “Middle- and low-income taxpayers, including our members, are unfairly burdened with the escalating costs for health care. We must remedy this unfair and immoral reality that is crushing our members and so many Americans.”

 Media Contacts:

Laura Barrett, MTA, 617-878-8267

Tim Sullivan, Massachusetts AFL-CIO, 617-680-2344

Jim Durkin, AFSCME, 617-367-6012

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