On December 18, 2019

Arbitrator sides with union in school health care bargaining

Decision will increase costs for school boards, taxpayers

By Lola Duffort/VTDigger

Last week, an independent arbitrator has sided with the union in negotiations for Vermont’s first-ever statewide health care contract for all school employees.

The binding decision brings an end to a contentious bargaining process that first started in April. The deal will cover about 40,000 people — teachers, administrators, support staff, and their families. It goes into effect Jan. 1, 2021, and lasts through Dec. 31, 2022.

“The arbitrator very clearly thought our proposal was more equitable and accessible,” said Darren Allen, a spokesperson for the Vermont-NEA.

Proposed double-digit health insurance rate increases mean that both sides – school districts and school employees – will likely see costs increase under the contract. Rates will be finalized by the state in January.

Prior to the deal, the tax commissioner released a forecast of a 6% hike in education taxes next year. Nearly 40% of the projected rise in school spending is tied to healthcare.

The Agency of Education used the cost estimates tied to the union’s bargaining proposal when it provided the commissioner with spending projections, according to agency finance manager Brad James.

“Obviously we’re disappointed in that result,” said Joseph McNeil, an attorney for the school boards’ bargaining team. “We’re concerned that rather than containing costs, the decision will actually increase costs, contrary to the desires of the Legislature and state administration.”

Allan McCausland, the New Hampshire-based arbitrator who made the final call, said he based his decision largely on the factors that Vermont statute dictated he consider in weighing the proposals.

“I thought both parties did an excellent job. Very thorough, very professional,” McCausland said.

And he noted that the union and school board bargaining teams, who went before a mediator before coming to him, had already come to agreement on the bulk of the issues. Notably, both sides, in their final proposals, had put forward a 80/20 employer/employee premium split for teachers on Gold and Silver plans.

But the union and school board teams had differed significantly in their approach to out-of-pocket costs. Under the contract proposed by the union, teachers and other licensed employees will have to pay maximum medical and pharmacy out-of-pocket costs of $400 for single coverage and $800 for all other tiers. Support staff employees will pay $300 for single coverage and $600 for all other tiers.

Licensed educators and support professionals working 17.5 hours or more a week are eligible for coverage. And the union’s proposal mostly sticks with health reimbursement accounts — instead of health savings accounts — which largely mirrors the status quo.

“All employees are going to have access to all tiers of coverage,” said Will Adams, a teacher at Hardwick Elementary who served as the spokesperson for the union bargaining team. That means that support staff, who, under local bargaining contracts, frequently only had access to health insurance for themselves, will now be able to get coverage for their spouses and children as well.

Legislators in 2018 created a 10-member commission tasked with negotiating a statewide health care contract. The commission included five representatives from the union side – four from the Vermont-NEA, and one from the American Federation of State, County, and Municipal Employees – and five representatives from school boards.

Traditional bargaining typically tasks a mediator or an arbitrator with crafting a compromise plan if the two sides can’t agree. But as an incentive for the two sides to come together on their own, the law that created the commission required an arbitrator to choose either the union or school board’s final offer, in its entirety. The arbitrator could not craft an alternate compromise plan.

A single health care plan for all public schools was a key priority for Republican Gov. Phil Scott, who believed a statewide benefit could save taxpayers millions. Teachers unions for a long time resisted the idea, but the Vermont-NEA ultimately reversed course in exchange for equal representation on the nonprofit board of the Vermont Education Health Initiative, which provides health insurance plans for Vermont schools.

The administration opposed giving unions equal representation on the VEHI board, and the governor ultimately let the omnibus bill that created the statewide bargaining commission pass into law without signing it.

In a statement, Scott spokesperson Rebecca Kelley said the governor “remains committed to the fiscal fundamental of growing spending no faster than the rate of growth in Vermonters’ paychecks.”

“This decision will make that more difficult to achieve and he hopes the Legislature will take another hard look at how we get these costs, and others, under control,” she added.

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