TriMet to demand up to $7,080 for past health insurance premiums
TriMet is preparing to send letters to more than 3,200 active and retired union employees, settling accounts for health insurance premiums going back as far as 2009. Most will be told they owe, and the amounts are as high as $7,080. In sample letters TriMet provided Sept. 19 to Amalgamated Transit Union Local 757, the Portland-area transit agency tells union members that if they don’t pay, they will face legal action and possibly discipline. Local 757, attempting to head off the threat, sent out its own letter the same day, asking members not to respond to the TriMet letter when it comes. In response to that, TriMet filed charges Sept. 26 with the state Employment Relations Board, saying the union’s letter violates the law.
The exchange is the latest tangle in a tortured contract struggle that has lasted nearly the entire duration of the 2009-2012 ATU-TriMet contract. Bargaining continued past the Dec. 1, 2009 expiration of the previous contract, but broke down in July 2010. At that point, under state law, binding arbitration was supposed to begin. But Local 757 filed legal objections to unlawful practices by TriMet, objections which were upheld by the Oregon Employment Relations Board, and that delayed the start of arbitration until May 2012. The arbitrator had to pick one side’s final offer in its entirety, and on July 13, he picked TriMet’s proposed three-year contract. The contract he imposed is retroactive back to Dec. 1, 2009, and it expires Nov. 30, 2012.
It’s not uncommon for a new union contract to have some retroactive application (typically a wage increase) if the new contract is finalized some time after the old contract has expired. But a key element of TriMet’s contract proposal was lowering the cost of its Regence BlueCross BlueShield health insurance plan by reducing the level of benefits. How do you impose retroactive changes to a health insurance plan that has already been paid for, and which employees have already used?
TriMet’s answer to that, in the sample letter: “You owe TriMet the difference between the total premium TriMet actually paid and the premium TriMet would have paid had the new plan design been in effect for all three years of the contract.”
To pay the difference for the 33 months of past benefits, TriMet’s letter tells union members to sign an authorization for pre-tax payroll deductions, or write a check for the full amount.
We will be acting with all deliberate speed to stop their latest craziness.” — ATU Local 757 leaders, in a letter to members
Payroll deductions would be the same monthly amount as the premiums some members had opted to pay before the arbitrator’s decision. Members who were enrolled in Regence BlueCross BlueShield were paying $226.10 a month for family coverage and $79.50 for employee only. At those rates, it would take union members more than two-and-a-half years to repay the amounts TriMet is saying they owe. TriMet spokesperson Mary Fetsch told the Labor Press by email that the agency has no plans to charge interest.
The 42 percent of members who were enrolled in the cheaper Kaiser Permanente plan, on the other hand, are told they are owed refunds ranging from $20 to $919. In its letter to members, Local 757 characterizes that as an attempt to divide the workforce, and advises members not to cash the checks. “There is no guarantee that you will not be asked to return the money once TriMet loses in the legal arena,” says the letter, signed by Bruce Hansen, Jon Hunt, and Mary Longoria, Local 757’s top three officers.
“We will be acting with all deliberate speed to stop their latest craziness,” the letter continues. “In the meantime, we ask that you stand together in solidarity, and refuse to respond to TriMet’s payment demand until such time as we obtain a judicial decision.”
TriMet’s sample letter contains a Sept. 28 deadline for employees to respond, but as of press time, the actual letter had not gone out. Fetsch, in the e-mail, said not all scenarios have been fully researched and calculated: “This will take some additional time as we are being very careful in order to provide employees an accurate accounting.”
The amounts owed differ depending on whether employees were part-time or full-time, active or retired, whether they had enrolled dependents or not, whether they were enrolled in the Kaiser or Regence plan, and whether any of those things changed between November 2009 and August 2012, as well as whether or not employees opted in January 2011 (at TriMet’s direction) to accept lower benefits or keep richer benefits and pay a premium.
That last point, especially, highlights the unfairness of the repayment demand. While bargaining went on, TriMet willingly extended the old benefit formula for a year. Then it asked employees starting January 2011 to pay their increased cost, or take reduced benefits and pay no premium. Now, even employees who opted for reduced benefits with no premium are being asked to pay $1,182 or $4,225 — because the benefit level of that first year, which TriMet had voluntarily extended, was richer than the level the arbitrator ended up imposing two years later.
The arbitrator’s ruling itself is contradicted by a July 18 administrative law judge’s order. TriMet has appealed that order to the state Employment Relations Board (ERB).
Local 757 has also filed a separate legal challenge to the arbitrator’s ruling, arguing in filings with ERB that it’s illegal to impose a contract proposal that itself contains elements which are illegal.
Meanwhile, in TriMet’s ERB charge over the union’s letter to members, it asks that ATU be ordered to tell its members to cooperate and to “make TriMet whole for health insurance payments it is unable to recoup as a result of ATU’s unlawful acts.”
Bargaining has not yet begun for the contract that would begin Dec. 1.