Report on the Joint State Health Benefits Plan Design Committee
The June legislation that eliminated collective bargaining for healthcare and cut the pension plan – PenBen – also created a Committee made up of management and labor to design new healthcare plans: the Plan Design Committee - PDC. The committee is made up of 6 Chris Christie appointees and 6 Union appointees. CWA has one of the Union seats on the committee.
The Committee had several meetings over the summer. The Committee discussed something called the Employee Group Waiver Program – EGWP – (pronounced EggWhip) which would have allowed the State to take advantage of National Healthcare to lower costs for Retiree prescription drugs. The Committee also discussed creating new healthcare plans in order to provide choices for employees and also to comply with the law.
The Management side of the PDC opposed the
Union side’s proposals in both of these areas and as a result
lost savings to the State of as much as $100 million.
At the last meeting, the Union side made a motion that would have allowed the State to take advantage of the forced reductions in prescription drug costs for medicare retirees under National Healthcare. The State would create an EGWP (pronounced EGGWHIP) - Employee Group Waiver Program - enrolling medicare retirees in a Medicare part D plan - and getting the benefit of lower prescription costs. Our motion allowed the state to do that contingent upon it paying the premiums of Medicare Part D and lowering the co-pays for retiree prescription drugs. The EGWP could save the State between $40 million and $100 million a year. Members of the management side of the committee said they agreed with our motion, however, they wouldn't vote for it saying they would only support it as part of a "package" of health plans that they wanted.
Under the legislation you have to have 7 votes for anything that actually changes a plan or requires State Health Benefits Plan Commission action.
The union proposal failed, garnering 6 union votes,
and opposed by 5 management votes.
The management side then produced a fully formulated package of new health plans. 2 of the plans were Direct 10 and Direct 15, and the Aetna and Cigna plan, which the union side has made clear we must protect. In addition to those plans, the management side produced a slightly lower cost plan and a significantly lower cost plan. In addition, there was a low cost/low quality plan with a $500 deductible and high penalties for out of network usage, and 2 high deductible plans.
At the same time, the union side learned that the healthcare consultant - AON - was proposing to change the premium ratios for Parent/Child coverage. The end result of that recommendation would be that the premium cost for single parents would increase 55% when you include the overall premium increase this year. It would go from $9000+ to $14,700+
The management side made a motion to pass all of their proposed plans including the 2 high deductible plans as is. They did not want to take the plans one at time.
The Union side caucused. We had two major problems. First - the lowest cost/low quality plans would have a very adverse impact on retired police and fire who are in "section 330 plans" where the State pays 80% of the lowest cost plan toward single post retirement medical. Second - we couldn't pass anything while there was still the possibility that single parents would have massive increases to their premium cost.
We returned to the meeting and we passed motions amending the management motion to eliminate the lowest cost/low quality plans and making support for passage of the entire package contingent upon there being a return to the 2011 premium ratios for parent-child coverage.
We told management that if we could take out the lowest cost/low quality plans and make sure that single parents were not blown out by healthcare costs we would support the package. We also continued to say what we had been saying all along that we wanted to work further on Wellness plans that actually reduce rather than shift healthcare costs. The Union side was willing to negotiate and wanted to create new plans and the EGWP.
When we voted FOR the amended motion, however,
management voted against their own motion and it failed 6 to 5!
They voted against their own motion!
Apparently the management side of the committee will not support anything unless they get it all. The result of this “my way or the highway attitude” is that the Christie side refused to pass the EGWP and the State will lose between $40 – $100 million in savings this year. (Doesn’t this remind you of how they lost $400 million in Race to the Top money?)
So . . . that's where we are right now. The law calls for mediation with a “Super Conciliator” in the event of impasse, but no mediation has as of yet been called for.
The Union side of the PDC will continue to strenuously represent the needs of our members. The PDC is, however, a poor substitute for collective bargaining. If healthcare were negotiated at the Table, we have no doubt that workers would have more cost effective and quality healthcare plans to choose from, and we would be further along in creating savings through an EGWP and through joint purchasing of pharmaceuticals.