Health Insurance, Voluntary Impasse Agreement and Negotiations with MTI

I thought it might be helpful to provide some facts and explanations about the topic of health insurance – hopefully this will clear up some of the misinformation and misconceptions present in the public discussions. It is important to remember that the focus must be on the total package settlement – because that is what has an impact on the budget. For example, Sun Prairie’s agreement to make changes in its health insurance (by using a joint committee to find a way to reduce health insurance costs) has been praised, as it should be. It should be noted, however, that Sun Prairie’s total package settlement was 4.75% – while Madison’s package, without switching health insurance carriers, was 3.98%. (A rough estimate is that a 4.75% settlement would have cost Madison about $1.5 Million more.)

In every contract negotiation with MTI since I first came on the Board (1990) the district has proposed changes to health insurance – and in most of those contracts there have been some modifications which saved money; among these changes are: self-funding of the first $300(single)/$600(family) of costs; increasing drug co-pays, moving to a PPO (Preferred Provider Option).

The Board is unanimous in its desire to negotiate changes to health insurance – and it will be a major focus of the negotiations with MTI, signing the Voluntary Impasse Agreement (VIA) does not change that. What the VIA does do is structure the conduct of negotiations. It sets out the schedule for negotiations, sets a date, if settlement has not been reached, to begin mediation and names a mediator, and lastly, if mediation does not result in a settlement, identifies a date for going to binding arbitration and names the arbitrator. The VIA sets the conditions for negotiation (teachers will not engage in any form of job action) and the conditions that will be in effect if we go to binding arbitration. These last conditions are in the form of a “poison pill” – intended to make arbitration less attractive to either side. MTI agrees that it will not propose a change to the salary schedule and the Board agrees not to change health insurance. The focus is on reaching a voluntary agreement.

Because we have not yet provided MTI with our proposals I cannot discuss them in public. I can however talk about the settlement we have reached with our custodians who are represented by AFSCME. The custodians agreed to change their health insurance to a choice of 3 HMO’s (Group Health, Physicians Plus and DeanCare). The savings from this change allowed a greater salary increase (2.5%). A small amount of the savings ($15,000) went back to the budget. These savings are realized only in the first year – thereafter, the base for figuring future costs uses the lower health insurance costs.

One of the most dramatic changes of the last 5 years (and one that has been little noted) is the movement of teachers from WPS to Group Health. This year more than 50% of the teacher’s unit take Group Health Insurance – the lowest priced HMO in the community.
Carol Carstensen

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2 Comments

Filed under AMPS, Budget, Local News, School Finance

2 responses to “Health Insurance, Voluntary Impasse Agreement and Negotiations with MTI

  1. Barb S

    Thanks, Carol. A couple of questions come to mind. For some reason, based upon what I read in the Isthmus, wasn’t it a Board majority but not a Board consensus on the voluntary impasse agreement approved by the Board and sent to MTI?

    I also have another question. After the teachers’ contract is signed, if either a) more existing teachers switch to GHC or to WPS or b) more new teachers than estimated sign up for GHC or WPS, is there a difference in savings/cost to the district than forecasted. If more folks are moving to GHC rather than the other way, aren’t there savings from those forecasted – to whom?

  2. Ed Blume

    One more question. A number of people have asked what difference the insurance issue makes if all savings go to salaries.

    I recall that in the short term the MMSD might not see any savings, but the savings come in later years. But I can’t remember any details.

    Can you address this issue, Carol?

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