VANCOUVER, WA – Vancouver’s public-employee unions unexpectedly find themselves at the vanguard of pushing smaller government.
They are beginning to explore providing health insurance to their members, rather than relying on the city for coverage. They are inspired, in part, by a new trust fund set up for the city’s 175 firefighters.
The city is renegotiating its contracts with many of its public employee unions amid a backdrop of declining city revenues and rising health care costs, something cities and states across the nation are facing.
“It’s safe to say that health care is a primary topic of discussion in all of our labor negotiations,” said Elizabeth Gotelli, the city’s human resources director.
And the firefighter union’s solution — to take control of providing health insurance to its members — has proved powerful.
Jeff Kipp, a Vancouver police sergeant and president of the Vancouver Police Officers’ Guild, said he is researching different ways the police union can follow in the footsteps of the International Association of Fire Fighters Local 452.
“There’s no doubt in my mind that we’ll find something similar to the Fire,” Kipp said. “But is the city going to let us do it? I don’t know.”
During collective bargaining, the city refused to let IAFF Local 452 become self-insured. In that scenario, the firefighters’ union would have managed a specific amount of money and paid for any health claims itself.
Instead, the IAFF Local 452 had a trust fund set up at the beginning of October that pays for physical, dental and vision care. The city of Vancouver pays into the trust the cost of premiums for each employee, which is $1,320.99 per employee per month, for a total of $231,173.25.
The city also will pay another five percent for rate increases in 2012 and 2013. The firefighters’ union will have to absorb any rate increases above that amount.
The city, which dealt with a significant budget shortfall this year, considers this a win. “The agreement will result in the city having financial certainty in terms of its future healthcare costs for that group of employees,” Gotelli said.
And Mark Johnston, president of the IAFF Local 452, said it gives the union a lot of independence to find health insurance specifically tailored to the firefighters’ health needs.
“The employees, through the union and trust, control the brokers, plan design, carriers and all aspects of the plan,” he said. “It’s designed for us, by us, and not imposed by the employer.”
Johnston, who said he has spoken with other unions about the trust, believes “all employee groups would benefit if their unions were in control.” A key advantage, he said, is a cheaper health insurance plan.
Kipp, the police union president, said the rates of the health insurance plans offered by the city have regularly increased each year between eight and 10 percent. He points to the commission charged by the city’s broker, Mercer, as the chief reason for this, describing the broker as “horrifically expensive.”
“It’s really curious to me that we haven’t done this before,” Kipp said. “They’re real success stories.”
Local 452 may have kicked off a trend. Other municipalities in Washington and Oregon, including Gig Harbor’s fire department and Clackamas County’s fire district, have opted to pursue their own health plans. Karl Koenig, president of the union representing Clackamas Fire District 1, said the union’s health retirement accounts became partially self-funded through insurance savings a year and a half ago. It has already saved $900,000 in administrative costs and through negotiating lower rates for deductibles, premiums, pharmacy drugs and other aspects of its health plan.
Kipp said the police guild will meet with the city for collective bargaining in another couple of weeks, and they’ll “have some firm ideas” at that meeting.
Gotelli would not confirm that the police guild is pursuing its own health insurance model, citing the confidentiality of collective bargaining. She also would not say whether other public employee unions are looking at the same thing.
But she did say that “the city is open to discussing and considering all health-care options and proposals brought forward by the union groups” in an effort to find cost containment and “sustainable growth for healthcare for our employees.”
From The Oregonian.