Last night the House of Representatives voted 113 to 42 to remove health care plan design from collective bargaining for municipal employees.
I’m grateful for all of the input I got on this issue, in largest volume from union members, but from many other citizens. And I’m respectful of all of the perspectives that have been offered to me.
Voting for this change was a necessity for two simple reasons: First, municipal employee health care has become unaffordable, preventing cities and towns from providing necessary services — municipal employee health care costs have been rising much more rapidly than state employee health care costs and have been absorbing all the new aid that the state has been able to send to cities and towns.
This is not the fault of municipal workers — the problem is economy-wide and we need to pursue economy-wide solutions. At the same time, it is not unfair for municipal employees to bear some of the cost of arresting the trend — private businesses across the state have been feeling the same pressures. Municipal employees will still be guaranteed a plan at least as generous as the state employee plan — a plan that I’m grateful personally to participate in.
Second, managing the terms of health plans through collective bargaining is entirely unworkable in the municipal context. To say this is not to challenge fundamental principles of workplace democracy. There are many issues that are very important to workers which are not amenable to collective bargaining — for example, municipal capital decisions whether to build new facilities and management decisions about which new workers to hire. Plan design is one of those issues.
Plan design is complicated and it is also the only issue that municipal employers have to apply equally to all of their unions. Typically, in a single town, workers may be represented by eight or ten or more different unions. A town can’t have multiple health care plans, so managers must negotiate simultaneously with all of those unions to reach agreement. Municipal managers are very daunted by those uniquely difficult negotiations and the result is that they mostly don’t even try, with the result that health care costs have continued to balloon at the local level. Again, this is not the fault of unions per se. They have played by the rules. But the rules don’t work and the rules need to change.
Most communications from union leaders about this issue have referenced Wisconsin and framed the changes as an assault on the rights of public workers. Many, including me, felt that the rules needed to change on this particular issue long before the political winds started blowing against public employee unions in other states. In Massachusetts, no one is trying to take away the funding of unions themselves or to destabilize them politically by changing unionization rules. I view the reform as a very modest and responsible labor law adjustment that reflects important practical realities.
The interesting question over the months to come is how the Senate will handle the issue. The Senate President has made no public commitments. The measure that the House adopted last night was included in the House version of the budget. The Senate Ways and Means Chair recently said he not decided to include any proposal at all on this issue in his draft budget which will come out next month. Ultimately, the issue will be resolved in a conference committee on the budget bill.
Note, see also this pre-vote post for extensive additional voter comments.
Will, can you clarify whether this bill allows unilateral changes to an existing contract, or changes after a contract expires, or changes at the next contract negotiation? I am extraordinarily uncomfortable with the idea of one party having the ability to unilaterally change the terms of the contract, lacking some formal event like bankruptcy.
PS — but this problem is a transient one; once current contracts expire, it’s gone.
In addition to what David Chase has said, the precedent that unilateral change sets is very disturbing. It’s a slippery slope in that if governments can change contracts when employees have delivered what they agreed to in good faith, so can private industry. It has the potential to take away the validity of a contract because there is no reason to believe that all parties will deliver the things to which they have agreed.
I am concerned by this as well. Is there such a thing that a typical contract length for municipal employee? How long is it?
In some situations, contracts have expired, but no new contract has been agreed upon – unions have bargained by not bargaining, saying No to any changes, so while they don’t gain salary increases, they do maintain prior benefits such as healthcare.
If a contract has expired, changes made with this bill would not be abrogating anything..
Certainly, if a contract has expired, it can’t be abrogated. However, that suggests that to implement a change of the kind that the House has just voted for, one should have rolling changes, that is, existing contracts should continue to be in force until they have expired.
Municipal contracts typically vary from one to three years, but the point of the reform is to put in place a different approach to health plan design. Municipal health care plan design changes need to be made from time to time to preserve quality and control costs. This reform permanently removes those changes from the scope of contracts and takes them out of the contract cycle.
Instead of having contractual protections, employees will have the protections of (a) a legal requirement that plans conform to the state wide standards set by the Group Insurance Commission; (b) representation of unions on the Group Insurance Commission; (c) the knowledge that any change made will be visible and will apply alike to all state and local employees and elected officials. Those are pretty good protections.
Note, although municipal employees will no longer bargain about the details of plan design, they will retain the ability to bargain over how much of the premiums they have to pay. In this respect, municipal employees will have greater bargaining scope than state employees whose premium shares are set by statute.
Thanks Bill. I am slowly learning about the point (b). I am not opposed to the law but the concern was specifically about the transition. It is not yet clear to me what happens to employees currently under contract. Are their benefits affected?
Yes, their benefits are affected. But if they don’t agree to the changes, then they automatically receive 20% of the savings from the plan design change.
Thank you for this very helpful explanation. As noted, these are extraordinary times, but this is an extraordinary situation that warranted modifications to the bargaining procedure for health insurance coverage.
I do commend the legislature for focusing on out-of-control costs but not yielding to the temptation to undermine the actual quality of health care itself (i.e., imposing therapeutic substitution by discretion as former Governor Romney tried to insert into his original state health care plan). The House is addressing the cost-sharing aspect at a time when public and private sector cost sharing is so different. Should local public employees seek to enroll in the Group Insurance Commission (GIC) plan, they can do so with the assurance that it is a high quality program overseen by people who are more concerned with the wellbeing of the people they cover than penny pinching over reimbursements or premiums.
Given the background that drives this policy decision and the credibility of those who will carry it out, this stands as a reasonable (and courageous) act by the legislature in the face of the political threats they confront in doing so.
That said, there are many more steps to go in this complex process. In baseball terms, it’s only the bottom of the third, with six innings to go (in this double header).
Glenn Koocher
Cambridge, Ward 11
Executive Director, MA Association of School Committees
Seems reasonable Will. I assume that Unions that voluntarily joined the GIC will see no impact from this as their plans are already in line with State employees?
Any estimates on the impact/savings to Belmont from this change if implemented?
Right, no impact on employees already in the GIC.
Not sure on Belmont numbers — the town will reassess when the final proposal is in place.
Will made the right choice, and gives a good rationale for the decision.
My initial reaction, reading about the vote was ire, but reading some of the rationale behind why someone like Will would support it helped. Understanding that this allows the towns some flexibility in a tough area of expense, while ensuring that municipal employees still have bargaining rights in many key areas, is a tough pair of goals to balance between.
Thank you, Will, for talking about it in such detail.
As an aside, why was the vote so late at night? Some news is making that into a sensational element of the story, as if the House has to “sneak a law through”.
We’re up late most nights in budget week. It’s pretty normal.
Press was all over the place — everything was very visible.