Change In Insurance Carrier Not Negotiable Without Substantial Changes In Benefits

The Hartford Police Union represents the rank-and-file sworn members of the Hartford, Connecticut Police Department. The health insurance clause in the agreement between the Union and the City describes in-network and out-of-network benefits, co-payments, lifetime maximum benefits, and other insurance benefits. The contract language specifically provides that “the City may provide health insurance benefits by other than the named insurance carriers provided the benefits and services provided by the new carrier are the equivalent or better than the existing benefits and services.”

Prior to 2016, the City used Anthem Blue Cross Blue Shield as its healthcare carrier. In 2013-2014, Union members and their dependents used Anthem network medical providers nearly 100% of the time. In 2015, members used Anthem network dental care providers 82% of the time.

In 2015, the City issued a request for proposals from health insurance carriers interested in bidding on the contract to administer all of its health insurance plans in 2016. Anthem and Cigna both submitted proposals. As part of its proposal, Cigna submitted data that its network included 90.5% and 76%, respectively, of the Anthem medical and dental network providers used by employees citywide. Data specific to the police bargaining unit was not provided.

The City selected Cigna to replace Anthem as its health insurance carrier effective January 1, 2016. The Union, concerned about the loss of some of the preferred providers, asked the City to delay the transition, and filed a grievance alleging the City’s upcoming switch to Cigna violated the contract by “choosing health and dental insurance that reduces benefits and services and by requiring members to change physicians without a proper disruption analysis or plan for transition of care.”

As the grievance was processed, Cigna gathered statistics on the transition. By October 31, 2016, 93.7% of the medical providers used by members were in Cigna’s network, with 93.7% of the claims and 95.4% of the services also in-network.

Connecticut’s Department of Labor dismissed an unfair labor practice complaint filed by the Union, holding that “the change from Anthem to Cigna did not constitute a substantial change in a major condition of employment under the specific circumstances of this case.” The Department ruled that “in this case, there is no question that the City unilaterally changed insurance carriers on January 1, 2016 and that health insurance is a mandatory subject of bargaining. The Union argues that Cigna has a materially worse provider network than Anthem, which disparity caused a significant number of members to collectively incur over $40,000 in additional deductibles, co-insurance payments and balance billing, experience disruptions in coverage, and suffer the anxiety of switching from their existing healthcare providers.

“We are not persuaded by this record that the change to Cigna constitutes a material change to the provision of services or the cost of the plans summarized in the collective bargaining agreement. The substantive terms and conditions of the negotiated plans remain unchanged with members retaining the option of using network providers for a modest co-payment or choosing to go outside the network at additional cost. Although Cigna’s provider matching percentages for 2014-15 fell below optimal levels, there is no evidence that Cigna’s network is substantially smaller or more limited than Anthem’s. While quantity alone is not dispositive, we think a member’s ability to select a new provider from a comparably sized network goes a long way toward ameliorating any disruption and anxiety associated with making that change.

“Turning to the estimated $40,000 impact on 148 members through July 31, 2016, the Union concedes that it made certain assumptions to achieve this figure. However, assuming arguendo that the Union’s calculations are correct, we note 93.7% of the medical providers utilized in that period were in Cigna’s network. Thus, while $40,000 may be a considerable sum, it is also a consequence of a network usage rate. As for the coverage issues members encountered after the transition, the record reveals they were due to a combination of factors in addition to the change in networks, including provider and claimant error. Again, we do not make light of the time and effort inherent in resolving such issues. Within the context of the record as a whole, however, they do not constitute of significant change to a condition of employment.”

City of Hartford and Hartford Police Union, 2017 WL 6813591 (CT. Dept. Lab. 2017).