byJohn McClaughry The sudden political struggle over health insurance for unionized teachers isn’t over but some useful lessons are emerging. This struggle was triggered by a provision of ObamaCare called “the Cadillac tax”. Starting in 2018, plans with premiums of over $10,800 a year for individuals and $29,500 for families will face a crushing 40% tax on those premiums.
Congress has delayed the Cadillac tax before, and could do so again. But next year school employees need to be in one of the Vermont Education Health Initiative plans designed to escape the tax.
In mid-April, with the Senate hard at work on the House-passed budget, GovernorPhil Scott suddenly produced a major new proposal or, it turned out, a demand.
The outcome envisioned by the governor is eminently desirable. School employees would enroll in a VEHI “Gold-level” health insurance plan, with premiums far below those of the “plutonium” level plans negotiated by the teachers’ union. This would result in reduced school budget expenses of $75 million.
Out of that $75 million, Scott proposes to annually fund teacher Health Savings Accounts in amounts large enough to hold the teachers harmless from the Gold plan’s higher deductibles and co-pays. By owning their own HSAs, the employees would become more sensitive to the benefits of preventive care, and reduce their overutilization of “free” health care.
Scott says this new arrangement would produce “up to $26 million” that would lower school property taxes.
The problem lies in getting from today to that outcome. The Governor wants to personally negotiate with the teachers’ union to effect these changes. The Vermont-NEA union is wedded – some would say fanatically wedded - to keeping health benefits in their negotiations with local districts.
SenatorTim Ashe’s counterproposal on the union’s behalf is to have the State force school boards to somehow cut their budgets if they are not able to negotiate the exact amount of reductions prescribed by the State in the legislation. It’s hard to imagine a more insulting and demoralizing intrusion into what’s left of “local control.”
The hard truth is that the union can’t “negotiate” with the State. The State has all the cards, and the union has basically none (other than a statewide strike and political revenge).
Scott needs to drop his hasty, late in the game proposal to have the State (him) negotiate with the union. Then we should do what we did with teacher retirement in 1946. The legislature should enact a law that makes teacher health insurance a state-specified benefit, defines the coverage, HSA contributions, and the 80/20 premium split (as for state employees now), and obliges the legislature to transfer the required premium dollars from the Education Fund to VEHI. If the union thinks it isn’t getting enough – a chronic condition – it can appeal to the legislature to change the law.
This leaves untouched the union’s statutory privilege to bargain with local districts over salary schedules, grievance procedures, hours of work, pupil discipline, sick leave, seniority, termination, vacations, special duty provisions, class schedules, dues deductions, and a dozen more issues customarily subject to bargaining.
In 2011 the Vermont-NEA aggressively supported GovernorShumlin’s Green Mountain Care, which would have taken health care out of union bargaining altogether. In 2013 it successfully supported a law imposing agency fees on non-members instead of leaving it as an issue for local bargaining. One would think it would be content to get the complicated issue of health insurance off the local bargaining table as well. But… NO!
Why is the union so fanatic about preserving “local control”? Never mind the rhetoric about “best for the community”, “a sacrosanct right”, and even “don’t take power away from working women”. The real reason is explained in an excellent report by Tiffany Pache on Vermont Digger (May 18).
The union’s seven UniServe Directors ($136,000 a year salary, plus benefits) stage manage local teacher negotiators facing often inexperienced school board members. Their whipsaw strategy is to get a favorable provision into one district’s contract, and then use that as a “comparable” to persuade “fact finders” to rule in favor of the union’s demand in other more resistant districts.
Scrapping the idea of “negotiations” over taxpayer-paid health insurance benefits altogether will make the union howl. But it can still play its whipsaw game with salary schedules and the many other contract issues, at least until taxpayers stiffen up and do something about it.
Democratic legislators need to tell the Vermont-NEA that Scott’s desired outcome offers many benefits for both teachers and taxpayers. But to achieve them, the Democrats should explain that they aren’t going to impose impractical and belittling conditions on local school districts just to preserve the union’s practice of whipsawing districts on health benefits, in addition to all the other negotiated benefits.
If the Democrats can’t stand up to the union to make this overall good idea happen, they are pretty likely to hear a lot about it in the fall of 2018.
John McClaughry is vice president of the Ethan Allen Institute (www.ethanallen.org)