HOW DID WE GET HERE?

A history of statewide bargaining.

2015: Due to concerns about the high cost of health plans offered to school employees, the Board of the Vermont Education Health Initiative (VEHI), the member organization that provides health plans to all school districts and their employees, votes to replace all of their Platinum Plus plans with health plans designed to be aligned with those available to Vermonters through Vermont Health Connect. Transition to the new plans scheduled to occur January 1, 2018. The new plans have substantially lower premiums than the old plans, which come along with higher out-of-pocket costs (OOP) including copays, deductibles, and co-insurance. School boards and local unions will bargain over premium and OOP cost share. Employers can provide an HRA and/or HSA to cover a portion of the OOP costs.

January 2017: Governor Scott proposes significant cuts to K-12 education in his 2017 budget. VSBA and VSA hold a summit to identify opportunities for cost containment without harming educational opportunities for children. One option identified was to move school employees to a statewide health care benefit, which could save $26 million based on the lower premiums. Proposals shared with legislative leaders and the Governor’s office.

April 2017: The Governor proposes statewide health care benefit as a cost-containment strategy. Legislative leaders strongly oppose the proposal.

June 2017: The Governor vetoes the budget. In Act 85, the final budget includes targets for health insurance negotiations and a “claw back” of savings that the legislature determines could be realized based on the Governor’s proposed statewide benefit. Act 85 also established a Commission to study statewide bargaining for healthcare benefits and provide the legislature a report before the end of 2017.

October 2017: VSBA members approve resolution calling for statewide bargaining of health benefits.

December 2017: Act 85 Commission on School Employee Health Benefits issues its report and recommends moving to a statewide health insurance benefit.

January 1, 2018: New VEHI health plans go into effect. Bargained agreements include complex OOP cost sharing arrangements with wide variability across districts. Savings did not materialize due to districts on average covering more than 80% of all out-of-pocket costs. The vast majority of school employees enroll in the Gold CDHP plan with an employer funded HRA.

Winter 2018: Two months into implementing the new plans, third-party HRA administrator, Future Planning Associates, declares it will no longer serve school districts because it cannot administer the complex HRA arrangements it represented it could. School employees experience challenges getting reimbursed for health care expenses. Many districts began covering 100% of all prescription drugs to reduce the challenges of employees due to the ongoing difficulties third-party administrators have with the various HRAs.

April 2018: Vermont NEA members approve a resolution calling for statewide health care negotiations and the reconfiguration of the VEHI board.

May 2018: Senate Education Committee takes testimony on a bill to move to statewide health care bargaining. VSBA raises concern about a single benefit for support staff and teachers – recommends two bargaining units + fiscal analysis. JFO fiscal analysis incomplete due to lack of information about support staff benefits. At Senator Baruth’s direction, VSBA collaborates with NEA on a bargaining process and timelines for possible inclusion in the bill.

Senate Education Committee endorses statewide bargaining language but does not move it out of committee. Senator Baruth indicates he will hold it for the expected veto session. No other committee in either the Senate of the House review the bill, not even labor or finance committees.

June 2018: Statewide bargaining language included in the special session budget bill; Governor Scott allows Act 11 to become law without his signature.

Act 11 and Statute

Act 11 of 2018 as passed (the Statewide Healthcare Bargaining language begins on page 235)

The Statute - 16 VSA Chapter 61

First Round of Bargaining

A Rocky Start

Statewide bargaining for school employee healthcare officially began on April 1, 2019 when the employee and employer commissioners met for the very first time. From the very beginning we knew it would be a challenge. While it was April Fool’s Day, the employee commissioners were not joking when they brought twice as many people to the first meeting as the statute allowed. This didn’t really comes as a surprise. For months the employee commissioners were insisting on bringing 5 “alternates” to the meetings as the two sides attempted to establish the ground rules for bargaining.

With no ground rules in place and 10 employee commissioners in attendance at the first meeting, both sides exchanged initial proposals and the session ended. The employer commissioners filed an unfair labor practice in an attempt to get some guidance from the Vermont Labor Relations Board regarding the union’s ability to bring alternate members to the meetings despite clear language in the statute and no agreement between the parties on the matter in ground rules.

At that time, the parties had yet to come to an agreement on whether the negotiations would be held in public. It was a surprise that just a few hours after the meeting the Vermont NEA shared it’s opening proposal as well as the employer commissioner’s proposal via a press release to the public. A rocky start indeed.

By early May things had not changed. VT NEA and AFSCME continued to send a team of 10 representatives to every bargaining session – twice the size allowed by state law. The Vermont labor Relations Board declined to comment on the unfair labor practice citing that Act 11 gave that jurisdiction to the arbitrator. The two sides eventually reached an agreement without the assistance of an arbitrator. The agreement stipulated that alternates could participate in caucuses but not negotiations. In the meantime the VT NEA continued to treat the negotiations as public, posting both sides proposals on a website they had created.

With the first two months of negotiations as a back-drop it should be no surprise that a negotiated settlement was quite unlikely. The two sides headed to mediation and fact-finding later that summer. We were pleased that the Fact Finder (view the report) clearly agreed with the Employers on the overall need to contain health care costs in public education. Specifically, the Fact Finder agreed with the employers on a number of issues ranging from the duration of the contract term where the employers proposed a four-year term, to the premium shares for support staff where the employers proposed that as of the last day of the two-year agreement, all support staff that are not at 80/20 split be moved to that differential. Unfortunately, the Fact Finder did not address the important issue of out of pocket costs and the two sides remained in firm disagreement on the use of HRAs vs. HSAs.

This led to arbitration. Act 11 outlined the procedure for arbitration. Both sides would submit “Last Best Offers” and the arbitrator would select one. Three full days of hearings ensued with both parties presenting detailed testimony from health care experts, data experts, economists, Vermont Policy and Finance experts, school board representatives and affected educational employees. The Employer’s witnesses consistently indicated that the goal of Acts 85 and 11, and the very reason for the state-wide Commission, was to provide a means for access to quality healthcare at an affordable and sustainable cost to employee participants, employing school districts and tax paying citizens.

At the end of the arbitrator hearing we were presented with yet another surprise. Each side was allowed to modify their last best offer. Although the evidentiary hearings ended on November 6, 2019, the parties were surprisingly given until November 18 to modify what they had previously submitted as their “last and best offers”, an allowance that is NEVER permitted in the equivalent proceedings involving State of Vermont and Vermont Judiciary employees.

There was still one more surprise left for us. On December 10th 2019 we were notified that the arbitrator had selected the Employee Commissioner’s Last Best Offer. We waited a few days for the analysis related to that decision assuming it would detail the reasons for the selection. To our surprise the analysis was rather brief and lacking in detail. The essence of the decision boiled down to one simple phrase: “The Employee Commissioners ‘Last Best Offer’ aligns most closely with the factors in Section 2103, and in the weight instructions to the Arbitrator in Section 2105, (3)(B), of the statute”.

That was it.