The URL can be used to link to this page

Home My WebLink About[09] Insurance Grievancet� MY OF KT. JOSEPH MEETING DATE: October 21,2010 Council Agenda Item 9 AGENDA ITEM: AFSCME Insurance Grievance SUBMITTED BY: Administration BOARD /COMMISSION /COMMITTEE RECOMMENDATION: PREVIOUS COUNCIL ACTION: The City offers two insurance plans to the employees, Aware Gold and HSA (Health Savings Plan). In 2009 the City executed a Labor Agreement with AFSCME which covers public works and administrative staff. The agreement identifies the portion of the deductible that that the City will contribute and that which the employee will cover. The City is still negotiating a contract for the year 2010 — 2011 so the terms of the existing contract apply. BACKGROUND INFORMATION: In 2006 the City was notified by the insurance company that rates for 2007 would increase 30%. As an alternative, the insurance agent presented the City with an option to convert to a Health Savings Insurance Plan. This plan carried a high deductible with a low premium. Since the City had to bargain the change the agent presented the plan to the employees and they had a choice of plan. The City Council at that time agreed to fund the deductible as the savings to the City would offset the deductible cost. The deductible amount is placed in an account for each employee at the First State Bank. Once the money is deposited the City has no control or access, that money becomes that of the employee. The deductible at the time the City converted was $ 4,400/$ 2,000 family /single. The following year, 2008, when the renewal came in, the deductible was listed as the same for 2007. After the year began, Blue Cross indicated that in error they did not change the deductible amount and it had increased to $ 4,800/$ 2,200. Since they made the error they covered the additional expense. The City contribution for 2008 as negotiated in both union contracts to $ 4,000 / $ 2,000. During discussion with the insurance agent, he explained that the deductible amount is indexed each year federally. Blue Cross Blue Shield (BCBS) or any other carrier does not set the rate. What they do control are the specifics in your plan. For example, the City HSA Plan has an embedded deductible. That is, the deductible is satisfied when one person has reached the single deductible rate or the family as a group meets the family deductible. If we did not have the embedded plan each family member would stand on their own and the maximum deductible is met when two family members have reached the single deductible. This method carries a lower premium. Therefore, BCBS cannot offer a plan with a constant deductible as the federal regulations control this. In 2009 the deductible increase to $ 4,800 /$ 2,400, the City continued to contribute $ 4,000 / $ 2,000. In 2010 the deductible increased to $ 5,200/$ 2,600. For the year 2010 the City has an executed agreement with LELS and the City contributes $ 4,000 / $ 2,000. The letter from the AFSCME indicates that the Grievance is a Class Action Step three grievance. The grievance affects all employees in the Union so step one and two were combined. The initial grievance was received in January 2010 and a letter was sent stating it is the City's position that the City is not in violation of MN Statute 471.161 reducing the aggregate value of the insurance. See the letter dated 9:1 February 17, 2010. A step three grievance is heard by the City Council see attached contract extract for grievance procedures. ATTACHMENTS: Request for Council Action 9:1 -9:2 Notification to AFSCME — scheduling of grievance 9:3 Email providing notification of Council Mtg 9:4 AFSCME notification of Step Three Grievance 9:5 -9:6 Extract of AFSCME Contract, Grievance procedure 9:7 -9:9 Extract of AFSCME Contract, Insurance Provisions 9:10 MN Statute — Aggregate Value 9:11 Response to step 1 & 2 Grievance 9:12 -9:14 AFSCME notification of step 1 & 2 Grievance 9:15 -9:16 Email agreeing to hold Grievance to negotiations 9:17 REQUESTED COUNCIL ACTION: After hearing the grievance the City Council has 10 days to notify the Union of the response to the grievance. 9:2 CITY OF ST. JOSEPH u,u�w cityof stjoseph_com October 11, 2010 Administrator Shannon Schroeder Judy Weyrens AFSCME Council 65 Sent VIA Email and Postal Service PO Box 207 St. Joseph MN 56374 Mayor Al Rassier RE: Class Action Step 3 Grievance: Health Insurance Councilors Steve Frank Dear Shannon: Bob Loso Renee Symaniev_ I am in receipt of the AFSCME Step 3 Class Action Grievance regarding Health Insurance. The Dale Wick City Council will consider the matter at their next regular meeting, in accordance with the grievance process outlined in the AFSCME Labor Agreement. The next regular meeting is October 21, 2010 and the matter will be on the agenda for 8:00 PM. Please note that the time is approximate based on the items prior to your agenda item. If you have any questions or need additional information please feel free to contact me at 320.363.7201. Sincerely, CITY OF ST. JOSEPH 1� JU Weyrens ministrator cc: Mayor Rassier and Members of the Council Tom Jovanovich, City Attorney Mary Beth Munden, Chapter Chair zt College Avenue North - PO Box 668 . Saint Joseph. Minnesota ;6374 Phone 3zo.363.7zoi fdX 3zo.363.034z 9:3 Judy Weyrens From: Judy Weyrens Sent: Monday, October 11, 2010 12:39 PM To: Shannon Schroeder ( shannon .schroeder @afscmecounci165.org) Cc: MaryBeth Munden Subject: scheduling of grievance Attachments: step 3 grievance, insurance.pdf Good Afternoon Shannon — Please find the notice that the grievance has been scheduled before the Council on October 21 Judy Weyrens Administrator City of St. Joseph PO Box 668 St. Joseph MN 56374 (320) 363 -7201 (320) 363 -0342 (Fax) jweyrensa—cityofstioseph. com 9:4 October 6, 2010 AMERICAN FEDERATION OF STATE, COUNTY & MUNICIPAL EMPLOYEES AFL - C!0 MINNESOTA COUNCIL NO. 65 118 CENTRAL AVENUE • NASHWAUK, MINNESOTA 55769 PHONE (2181885 -3242 • FAX (218) 885 -3245 • TOLL FREE 1- 888 -474 -3242 ® ®,.. City of St. Joseph City Council P.O. Box 668 St. Joseph, MN 56374 RE: CLASS ACTION STEP 3 GRIEVANCE: HEALTH INSURANCE Dear City Council Members, LPN F ly, �MPtoyt � CCT / X010 I am contacting you in relation to the health insurance change that occurred for January 1. First and foremost the Union did not vote on an increase to the deductible (and did not agree with it) but the City stated they had no control over it. The only way for the City to maintain the aggregate benefit is to contribute the increase to the deductible. The City cannot change the aggregate benefit without an agreement from the Collective Bargaining Group per MN statute 471.6161 Group Insurance, Governmental Units. Specifically Subdivision 5, Collective bargaining. The aggregate value of benefits provided by a group insurance contract for employees covered by a collective agreement shall not be reduced, unless the public employer and exclusive representative of the employees of an appropriate bargaining unit certified under section 179A.12, agree to a reduction in benefits. There has been no such Agreement for a reduction in benefit, such as an increase in the deductible. It has come to my attention that this month half of the deductible was not fully contributed. Deductible is now $2600.00 for single coverage and $5200.00 for family coverage. Employees have agreed per contract to contribute $200.00 to the deductible for single coverage and $400.00 toward the deductible for family coverage. Half the employers' contribution for single is $1200.00 and the other $1200.00 to be paid in equal distributions throughout the rest of the year, just as with family coverage half the contribution is $2400.00 with the other $2400.00 being contributed equally over the calendar year. The Union For Public Employees 9:5 The Union's expectation is that all on that plan shall receive the proper payment toward their deductible and those on the aware gold plan shall have their contribution based on this formula as well as the employer will contribute to that plan based on 80% of the HSA premium plus the amount contributed toward the deductible. There has been no negotiated change and therefore the contract remains in effect and per PELRA and no reductions can be made. Please contact me with any questions or let me know when the next Council meeting is if you would like my attendance for this issue. :Z- Shannon M. Schroeder Staff Representative AFSCME Council 65 PO Box 207 St. Joseph, MN 56374 320 -253 -1078 cc MaryBeth Munden, Chapter Chair 9:6 Extract of 2009 AFSCME Labor Agreement ARTICLE 6 EMPLOYEE RIGHTS - GRIEVANCE PROCEDURE 6.1 DEFINITION OF A GRIEVANCE - A grievance is defined as a dispute or disagreement as to the interpretation or application of the specific terms and conditions of employment, as outlined in this agreement. 6.2 PROCEDURE - Grievances, as defined by Section 6.1, shall be resolved in conformance with the following procedure: Step One An employee claiming a violation concerning the interpretation or application of this agreement shall, within 14 calendar days after such alleged violation has occurred or an Employee reasonably could be expected to be aware of it, present such grievance to their supervisor. Members of the Maintenance J Utility Staff shall provide such grievance to the Public Works Director, members of the City Office Staff shall provide such grievance to the Finance Director and members of the Police Administration support staff will provide such grievance to the Police Chief. The Supervisor will discuss and give an answer to such Step 1 grievance within seven (7) working days after receipt. A grievance not resolved in Step 1 and appealed to Step 2 shall be placed in writing setting forth the nature of the grievance, the facts on which it is based, the provisions of the Agreement allegedly violated, the remedy requested, and shall be appealed to Step 2 within seven (7) working days after the Employer's representative's final answer in Step 1. Any grievance not appealed in writing to Step 2 by AFSCME within said seven working days shall be considered waived. Step Two: If appealed, the grievance shall be reduced to writing and presented to the City Administrator. The appeal must be submitted no later than (5) five working days from the date of the supervisor's answer. A 2nd step meeting shall be scheduled seven (7) work days from receipt of the written grievance in an effort to resolve the grievance. The meeting shall be 9:7 Extract of 2009 AFSCME Labor Agreement attended by the supervisor, Administrator, the grievant (s), the steward and /or another Union Official. The parties will use their best efforts to make sure that necessary information used as the basis of the grievance /answer is available at the meeting. The parties will attempt to resolve the issue at the Step 2 meeting. However, if it is not fully resolved, the City shall make a written reply to the union within ten (10) working days from the date of the 2nd step grievance meeting. Discharges, however, shall be reduced to writing by the Employee and /or the Union Steward and forwarded by the Union Steward to the appropriate supervisor no later than five (5) work days from the date of discharge. Step 3 If appealed to Step 3, the grievance shall be submitted in writing to the City Council. The City Council shall consider the grievance at the next regularly scheduled meeting (grievance must be received at least seven (7) days before the meeting to be included in the agenda). At the meeting either the Employee or AFSCME may make whatever presentation deemed appropriate to the City Council. Within ten (10) days of the meeting, the City Council shall issue a written answer to the grievance. A grievance not resolved in Step 3 may be appealed by AFSCME to Step 4 within ten (10) days of the issuance of the written decisions by the City Council. Any grievance not appealed by AFSCME within ten (10) calendar days shall be considered waived. Step 4 A grievance unresolved in Step 3 and appealed to Step 4 by AFSCME shall be submitted to the Director of Mediation Services for mediation, subject to the provisions of the Public Employment Labor Relations Act, Minnesota Statutes Chapter 179A. If either party petitions for binding arbitration stating that an impasse has been reached, and the Director determines that further mediation 9:8 Extract of 2009 AFSCME Labor Agreement would serve no purpose, the Director shall certify the matter to the Minnesota Bureau of Mediation Services for binding arbitration, in accordance with Minnesota Statutes Chapter 179A. 6.3 WAIVER - If a grievance is not presented within the time limits set forth above, it shall be considered waived, absent extraordinary circumstances. If a grievance is not appealed to the next step within the specified time limit or any agreed extension thereof, it shall be considered settled on the basis of the Employer's last answer. 6.4 EXPENSES - Any costs or expenses incurred in conjunction with mediation or arbitration procedures shall be borne equally by the Employer and the Union, with each paying one -half of the costs or expenses incurred. Each party shall be responsible for their own attorney fees with regard to any grievance procedure. 6.5 EXCLUSIVE REMEDY - This procedure shall be the sole and exclusive means of processing a grievance. 9:9 PXt ✓UJ Zooci A9t'Qvi,1eA-f ARTICLE 17 FAMILY MEDICAL LEAVE ACT 17.1 All parties involved in this bargaining agreement are bound by the Family Medical Leave Act and by any amendments or judicial interpretations thereto. ARTICLE 18 HEALTH BENEFITS 18.1 The Employer shall provide health and dental insurance to full time regular and part time regular (those working 32 hours per week or more, prorated based on hours worked; i.e.: If an employee works 35 hours, the Employer would pay seven eighths of the employer contribution). The Health insurance offered shall contain Major Medical, Medical Health Care Coverage and Dependents Health Care Coverage 18.2 Health Insurance: The Employer will provide the following two health insurance options: a. High Deductible Health Plan 100 (HSA). The City will pay 80% of the monthly insurance premium. In addition the City will fund the deductibles as follows: Employer Contribution Employee Contribution Single Coverage $ 2,000 $ 200 Family Coverage $ 4,000 $ 400 In conjunction with the first pay period of 2009, the City will deposit one half (1/2) of the employer contribution in to each individual HSA account. The remaining deductible will be divided into 24 equal payments and will be deposited with each regular pay check. Eligibility for participation shall be based on section 18.1 of this agreement. b. Aware Gold with Co -pay. The maximum premium the employer shall pay is that equal to the amount of premium paid for the HSA 100 Plan, plus the portion of the deductible the employer contributes for HSA 100 Plan. 18.3 Dental Insurance: The Employer shall provide dental insurance for both the employee and dependents. The Employer will pay 80% of the dental insurance premium with -13— 9:10 471.6161, 2010 Minnesota Statutes 2010 Minnesota Statutes 471.6161 GROUP INSURANCE; GOVERNMENTAL UNITS. Page 1 of 1 Subdivision 1. Group insurance coverage. "Group insurance coverage" means benefit coverage provided to a group through a carrier authorized under chapters 61A, 62A, 62C, and 62D to do business in the state. Subd. 2. Request for proposal. Every political subdivision authorized by law to purchase group insurance for its employees and providing or intending to provide group insurance coverage and benefits for 25 or more of its employees shall request proposals from and enter into contracts with carriers that in the judgment of the political subdivision are best qualified to provide coverage. The request for proposals shall be in writing and at a minimum shall include: coverage to be provided, criteria for evaluation of carrier proposals, and the aggregate claims records for the appropriate period. A political subdivision may exclude from consideration proposals requiring self - insurance. Public notice of the request for proposals must be provided in a newspaper or trade journal at least 21 days before the final date for submitting proposals. Subd. 3. Selection of carrier. The political subdivision shall make benefit and cost comparisons and evaluate the proposals using the written criteria. The political subdivision may negotiate with the carrier on benefits, premiums, and other contract terms. Carriers applying must provide the political subdivision with aggregate claims records for the appropriate period. The political subdivision must prepare a written rationale for its decision before entering into a contract with a carrier. Subd. 4. Contract length; negotiation. Group insurance contracts may not exceed five years in length, including all extensions. The political subdivision shall request proposals for coverage at least once every 60 months. Employees may be added to an existing group pursuant to a joint powers agreement under section 471.59. Subd. 5. Collective bargaining. The aggregate value of benefits provided by a group insurance contract for employees covered by a collective agreement shall not be reduced, unless the public employer and exclusive representative of the employees of an appropriate bargaining unit, certified under section 179A.12, agree to a reduction in benefits. Subd. 6. Filing of contract. Every political subdivision contracting for and providing group insurance coverage as provided in this section shall file with the clerk or other comparable officer of the subdivision a copy of the group insurance contract and make the copy available for public inspection. Subd. 7.[Repealed, 1996 c 305 art 1 s 1021 History: 1989 c 90 s 2 9:11 https: / /www.revisor.nm.gov /statutes / ?id= 471.6161 10/15/2010 CITY OF ST. JOSEPH WWW.cityof stjoseph.com February 17, 2010 Shannon Schroeder 118 Central Avenue Administrator Nashwauk MN 55769 Judy Weyrens RE: Class Action Step 1 and 2 Grievance — Heath Insurance Mdyor Dear Shannon: All Rassier This letter is in response to the class action grievance dated January 29, 2010 regarding Councilors health insurance. The grievance alleges that the City of St. Joseph violated MN Statute Steve Frank 471.6161 changing the aggregate value of the health insurance benefit without bargaining Bob Loso the change. The grievance states that the City changed the deductible without approval of Renee Symanietz the Union and accordingly did not deposit one half of the deductible in the employee's Dale Wick individual HSA account in January as required by the existing contract. On January 9, 20101 met with you and union representative Mary Munden to discuss the grievance. The Union is requesting the City deposit one half of the current deductible, $ 2,600 for family and $ 1,300 for single in the employee's HSA accounts. The HSA deductible increased from $ 4,400/$ 2,200 to $ 5,200/$ 2,600 for the calendar year 2010. Increasing the out of pocket expense to the employee. The City understands that changes in benefit need to be negotiated and we have been meeting to ratify a labor agreement without success. One of the negotiating Items is the amount of employer contribution for 2010. As I had stated in earlier conversations, the deductible for the HSA is indexed annually and the City has no control over the amount. The City has not changed.plans. The Contract states the City would offer a High Deductible Health Plan which we are. Like the premium, the City has not control over the deductible. In anticipation of advancing to a new year with an open contract, a memo was sent to all employees notifying them how the deductible for 2010 will be handled until a new contract is executed. The memo stated that the City would continue to follow the existing contract until a new agreement is reached and at that time necessary adjustments would be made. (See attached memo) The existing contract states that the employer contribution for the HSA is $ 4,000 for family coverage and $ 2,000 for single coverage. Section 18.2 of the contract further states that "in conjunction with the first pay period of 2009, the City will be deposit one half (112) of the employer contribution into each individual HSA account. ZS College Avenue North • PO Box 668 . Saint Joseph, Minnesota 56374 Phone 32-o.363.7zoi Fax 3zo.363.034z 9:12 Shannon Schroeder February 17, 2010 Page -2— On January 13, 2010 the City followed the terms of the current contract and deposited one half of the employer contribution listed in the contract into the individual HSA accounts. Therefore, the City is not violating MN Statute 471.6161 as we are actively bargaining the 2010 employer amount, acknowledging that once the contract is settled the difference will be applied to the employee. Please let me know if you have additional questions. Sincerely, CITY OF ST. JOSEPH Judy Weyrens Administrator 9:13 MEMO DATE: December 2, 2009 TO: All Employees FROM: Judy Weyrens RE: 2010 Insurance Rates Please find below the insurance rates far the year 2010: HSA Premium (Monthly) $ 3W.W $ $1,198.00 $ 239.60 Deductible $ 2,600.00 75 bo $ 5,200.00 IRS Yearly Max Deductible $ 3,050.00 $ 6,100.00 At this time we are calculating the deductible based on the existing contract which states that the CJty will contribute $ 2,000 towards the single deductible and $ 4,00000 towards the family deductible. Once contracts are settled the deductions will be adjusted based on the new contract Therefore, In January the Oty will deposit one half the deductible (based on the 2009 contract) In your HM account and the balance will be divided into equal installments and paid with each pay period. AWARE GOLD Premium (Monthly) Family Emcloyee $1,720.50 $ 428.77 Cap is equal to the amount of premium and deductible that Js paid toward; the HSA Plan. The calculation includes the monthly premium plus the total City contribution towards the deductible. Since we still have an oxen contract the terms of the exdstina 9:14 2010 -01 -29 10:28 AFSCME65: Shannon S 13207322562 - 320 363 0342 Greater M innesota Council WWW.AMMECOUNC1L65.ORG American Federation of Statrt, County and Municipal Employees, AFL -CIO January 29, 2010 Judy Weyrens, Administrator City of St. Joseph P.O. Box 668 St. Joseph, MN 56374 RE: CLASS ACTION STEP 1 AND 2 GRIEVANCE: HEALTH INSURANCE Dear Judy, I am contacting you in relation to the health insurance change that occurred for January 1. First and foremost the Union did not vote on an increase to the deductible (and did not agree with it) but the City stated they had no control over it. The only way for the City to maintain the aggrcgate benefit is to contribute the increase to the deductible. The City can not change the aggregate benefit without an agreement fimn the Collective Bargaining Group per MN statute 471.6161 Group Insurance, Governmental Units. Specifically Subdivision 5, Collective bargaining. The aggregate value of ben#ft provided by a group iasaraace contract for employes covered by a collective agreement shall not be reduced, unless Ike public employer and exclusive representadve of the employees of an appropriate bargaining unit, certPd ander sedion 179A.12, agree to a reduction in be►re, jitrt. There has been no such Agreement for a reduction in benefit, such as an increase in the deductible. It has come to my attention that this month half of the deductible was not fully contributed. Deductible is now $2600.00 for single coverage and $5200.00 for family coverage. Employees have agreed per contract to contribute $200.00 to the deductible for single coverage and $400.00 toward the deductible for family coverage. Half the employers' contribution for single is $1200.00 and the other $1200.00 to be paid in equal distributions throughout the rest of the year, just as with family coverage half the contribution is $2400.00 with the other $2400.00 being contributed equally over the calendar year. Your Hometown Union 118 Central Ave. The Union For Public Employees Drone: 218.885~9242 Neahwauk, MN 55769 Toff Free: 1- 888. 4743212 :- �. Fax: 218- 88x-3m P 2/3 9:15 2010 -01 -29 10:28 AFSCME65: Shannon 5 13207322562 » 320 363 0342 P 3/3 The Union's expectation is that all on that plan shall receive the proper payment toward their deductible and those on the aware gold plan shall have their contribution based on this formula as well as the employer will contribute to that plan based on 8016 of the HAS premium plus the amount contributed toward the deductible. There has been no negotiated change and therefore the contract remains in effect and per PELRA and no reductions can be made. This is stated as a Step 1 and 2 grievance as the Department Heads do not have any power over these benefits but a copy has been provided to them per Step 1. Please contact me with any questions. Respectfully, C,J4 - Shannon M. Schroeder Stafr Representative AFSCME Council 65 414 61' ST. NE Long Prairie, MN 56347 cc MaryBeth Munden, Chapter Chair Mike SworskL Vice President Department Heads 9:16 Judy Weyrens From: Judy Weyrens Sent: Thursday, February 25, 2010 8:57 AM To: 'Shannon Schroeder' Cc: MaryBeth Munden Subject: RE: latest offer Good Morning Shannon - Absolutely, we all agree that we are negotiating the item and it will resolve itself with the ratification of a contract. Thanks Judy From: shannon.schroederl @gmail.com [mailto :shannon.schroederl @gmail.com] On Behalf Of Shannon Schroeder Sent: Thursday, February 25, 2010 8:51 AM To: Judy Weyrens Cc: MaryBeth Munden Subject: Re: latest offer Judy The group is still considering this. In the meantime we still have the Insurance grievance the next step being to address the Council. The Union would propose to hold the grievance in abeyance at this time and focus our efforts on settling an Agreement which in effect would also settle the grievance without pushing the issue into an arbitration. So as we are not withdrawing it we would just propose to put it on hold while we mutually try and find an Agreement. Is this agreeable with you? Thank you, Shannon On Wed, Feb 17, 2010 at 6:06 PM, Judy Weyrens <jwe r�La-)cityofstjoseph.com> wrote: Good Afternoon Shannon — I had a chance to meet with the negotiating committee last night to discuss the latest offer. With the latest news of the Governor, the City is expected to lose approximately 215, 000. While this is just tentative, we know there is going to be some loss and it will be significant. St. Joseph relies heavily on LGA with the latest proposal, St. Joseph will have almost 50% of our LGA and LGA was the single largest revenue stream for the budget. The Council has already left open positions and made reductions to prepare for the unallotment announced last year. This latest news is devastating to the City. In order to prepare for the large cuts the City offers the following: On call pay $ 15.00 Per day, 2010 9:17 THIS PAGE INTENTIONALLY LEFT BLANK 9:17