Arbitrator’s Opinion Does Not Violate State Health Insurance Statute

When the Town of Athol, Massachusetts unilaterally increased copayment amounts for medical services, Local 1751 of the International Association of Fire Fighters challenged the decision through the filing of a grievance. An arbitrator concluded that changes in copayments were a mandatory subject of collective bargaining and that the Town violated the contract by making the changes unilaterally. As a remedy, the arbitration award required the Town, among other things, to restore the cost and structure of copayments to the levels before the changes and to make Union members whole for economic losses resulting from the change in copayment rates.

The Town challenged the Arbitrator’s opinion through the filing of a lawsuit. A trial judge confirmed only the portion of the Arbitrator’s opinion that held that the Town was obligated to bargain over the change in benefits, but struck down the remedy awarded by the Arbitrator. The dispute ultimately ended up before the Massachusetts Supreme Judicial Court.

The Court upheld the arbitration decision in its entirety. The Town contended that the Arbitrator exceeded her authority by ordering restoration of prior rates of contribution and by requiring a “make-whole” remedy because compliance with those portions of the award would require the Town to violate a state statute requiring uniformity of contribution rates for indemnity health care plans among employees of a governmental unit.

However, the Court found, the statute “only applies to plans of indemnity health insurance. The parties point to no finding that the plans at issue in this case – identified as Blue Cross Blue Choice and HMO Blue – were indemnity plans. The issue apparently was not raised before the Arbitrator. Absent a finding that the plans were indemnity plans, there was no basis for the Superior Court judge’s conclusion that reinstating prior rates of contribution, or making restitution to the Union for economic losses, required the Town to do an act prohibited by that statute. It was therefore error to vacate those provisions of the award on that basis.”

Town of Athol v. Professional Firefighters of Athol, Local 1751, 2014 WL 5369123 (Mass. 2014).