On the New Health Plan Option
By Lisa Minnick, WMU-AAUP President
By now faculty and other WMU employees will have seen the email from President Dunn, dated July 22, 2016, announcing the addition of a second health insurance option to be offered to WMU employees beginning in January 2017. As he wrote in his email, each employee group on campus will have the option to allow (or not allow) the administration to offer the new plan to its members.
If WMU-AAUP faculty members choose to allow the new plan to be offered to our bargaining unit, our existing plan, the BCBSM PPO that we have negotiated with the administration, would continue to be offered alongside the new plan.
We will provide an analysis of the BCBSM Healthy Blue Living HMO plan to the faculty in the next few weeks so that each faculty member will be well equipped to make an informed decision about whether the WMU-AAUP should agree to allow the plan to be offered to the faculty. We will be seeking your input as we go forward.
What follows is my perspective on this development as the WMU-AAUP representative on the alternative healthcare committee.
The idea of adding a second plan, specifically one that lowers premium costs for employees, was proposed by another employee group on campus, the WMU chapter of AFSCME, whose bargaining unit includes maintenance, landscape, dining, custodial, and other service staff. The health insurance premiums assessed to individuals vary by employee group at WMU. As most faculty are aware, our group, the board-appointed faculty, pays the highest premiums, but what maybe a lot of faculty don’t know is that employees in groups whose median pay is lower than that of the faculty still face costs that are unacceptably high, especially for the two-person and family plans.
So I can understand why our AFSCME colleagues are fighting for more affordable health insurance for their membership. We join them in their ongoing attempts to reduce healthcare costs for all WMU employees, especially the lowest paid among us, as these costs have become increasingly burdensome in recent years.
But I am not as optimistic as President Dunn seems to be that this new plan is the answer.
As I have noted, board-appointed faculty already pay the highest insurance premiums of any employee group at WMU, a rate that is the same as what senior administrative officers pay, even though the median and mean salaries of that employee group are of course significantly greater than ours. One way to cut costs for lower-paid employees, then, might be to ask senior administrators to bear more of their share of the burden.
And it is probably worth noting that not all senior administrators are even paying the same premiums as faculty. For example, President Dunn’s premium is $0 for his two-person plan, compared to $3933 per year for faculty. Additionally, his retirement agreement guarantees continuing free coverage for himself and for Mrs. Dunn for the rest of their lives. (Faculty and staff retirees, by contrast, have seen their share of healthcare premiums spike in recent years.)
In his email, President Dunn wrote:
A committee comprised of representatives from all the benefits-eligible campus employee groups has been working since September to identify a less expensive health care plan option. They have thoroughly assessed one Blue Cross Blue Shield of Michigan health care plan and have come to the conclusion that it should be added as an option—an alternative to the BCBSM PPO that WMU already offers to employees.
I represented the faculty on this committee, so I can say that this conclusion was not unanimous and that in fact I remain skeptical about the cost savings that individuals who choose the new option, BCBSM Healthy Blue Living HMO, will actually see over time. Additionally, I am concerned about the potentially burdensome conditions that the insured person (and spouse, for those on the two-person plan) must meet in order to qualify for this plan. If these conditions are not met, the insured will face reduced coverage and higher out-of-pocket costs.
Along with members of our 2014 bargaining team, I believe that there are better ways to reduce costs for faculty that do not involve intrusive “wellness” requirements or taking chances with the health and wellbeing of our families by gambling on a plan that may include some savings in the short run but that may not be the best investment over time.
Additionally, when this topic was discussed at the WMU-AAUP chapter meeting on April 8, 2016, the faculty expressed its dissatisfaction with the prospect of major decisions about our healthcare being made outside of contract negotiations and passed a resolution invoking the chapter’s rights under Article 45 of the Agreement:
45.§1 AGREE AND ACKNOWLEDGE. The parties acknowledge that during the negotiations which resulted in this Agreement each had the unlimited right and opportunity to make demands and proposals with respect to any subject or matter not removed by law from the area of collective bargaining and that the understandings and agreements arrived at by the parties after the exercise of that right and opportunity are set forth in this Agreement. Therefore, Western and the Chapter, for the life of this Agreement, each waives the right, and each agrees that the other shall not be obligated to bargain collectively with respect to any subject or matter referred to or covered by this Agreement and with respect to any non-mandatory subject of bargaining not specifically referred to or covered in this Agreement, even though such subject may not have been within the knowledge and contemplation of either or both of the parties at the time that they negotiated or signed this Agreement.
Our contract is not binding on other employee groups, of course, some of whose members are facing serious financial challenges as a result of increasing healthcare costs in recent years. And the administration has the legal right to offer an additional health insurance plan without negotiating it with us, as long as they continue to offer the existing plan as negotiated, which they will do.
As I have said, I think there are better ways to get costs down, including innovative approaches that have not been considered before, and our 2017 negotiation team will be exploring that. But I think we can all understand why many of our staff colleagues are anxious for relief sooner rather than later, as we also respect their right to make decisions that are best for themselves and their families.
A question that I raised during the committee’s deliberations over the past year was whether adding a second plan would create an “adverse selection” situation, in which healthier people might leave the existing BCBSM PPO for a plan that is less expensive up front and ultimately raise costs for those who choose to remain with the PPO. In his recommendation (linked here) to VP for Business and Finance Jan Van Der Kley on behalf of the committee, VP for Human Resources Warren Hills included the following request:
“With the success of this plan option, we also ask that for subsequent years costing of both plans would share the pooled experience of their combined participation and that the pricing differential would continue to be based upon the difference in plan definitions, not specific to the experience of participants in either group.”
For me, one of the positive things that came out of my service on this committee over the past academic year was getting to work closely with colleagues from AFSCME, the Professional Support Staff Organization, the Administrative Professionals Association, and the Michigan State Employees Association (WMU’s power plant workers), along with members of the human resources team at WMU. While the outcome of our work is not what I had hoped for, it was a great experience to have the opportunity to work closely on a long-term project with these intelligent, thoughtful people. While attending a two-hour meeting every two weeks for a year to talk about health insurance may not sound like the most exciting way to spend time, I always looked forward to seeing these terrific colleagues. Working together in this way also offered us the opportunity to build solidarity based on our shared commitment to Western Michigan University, our students, our community, and our members. I appreciate the wisdom and dedication they brought to this project, and I respect their perspectives and their decisions.
Faculty can expect to receive more information soon from the WMU-AAUP about the proposed new health plan, and we will also be seeking your input as we go forward. If you have questions, by all means send them along. Please email email@example.com. I might not be able to answer all of your questions right away, but if I don’t know the answer, I will find out for you.