Unions accept University of Minnesota health care cost hikes after four months of vocal opposition

Technical, clerical and health care workers’ unions at the University of Minnesota have approved contracts accepting cost increases to the employee health insurance program after more than four months of vocal opposition to the hikes.

A Board of Regents committee will review the contracts Dec. 12, which include a 3 percent raise for most union members. If passed, the contracts will face the full board the next day.

University officials couldn’t comment on the union contracts because the regents haven’t approved them.

The Office of Human Resources announced in a July email that it was making changes to the UPlan, the employee health care program, including adding a deductible and increasing copays for primary and specialty care. The email said the cost increases were necessary to help the University avoid a $48 million excise tax in 2018.

Beginning that year, the Affordable Care Act will put an excise tax on “high-value” insurance plans to discourage consumers from overusing the benefits on these plans.

To assess whether the cost increases will put the value of the UPlan at the right level to avoid a tax, the University needs to implement the changes as early as 2014, the July email said.

Although cost increases aren’t ideal, faculty members generally accept the UPlan changes, said law professor Fred Morrison.

“I think there is an understanding among many faculty that they will be necessary,” he said. “But they are unfortunate.”

The annual open enrollment period, when UPlan members can adjust their health insurance plans, ended Monday, according to OHR.

Some union members likely took advantage of that time to find the most inexpensive insurance plan possible, said Cherrene Horazuk, president of the American Federation of State, County and Municipal Employees chapter of University clerical workers.

She said people have told her they were looking at the lower-cost, smaller-network Accountable Care Organization plan, commonly known as an ACO, which the University is offering for the first time in 2014.

“I know that people were very concerned about the costs overall,” Horazuk said.

Sliding scale set aside

Three local AFSCME chapters held a rally in opposition to UPlan cost increases and in support of a sliding scale model for health insurance premiums in September. Under a sliding scale model, employees would pay premiums tied to their salaries.

“It’s an equitable way of distributing the costs,” said Barbara Bezat, president of the AFSCME chapter of University technical workers.

But after repeated attempts at discussing the sliding scale proposal with the University, union leaders said, the recently approved contracts don’t include the model.

“The University was unwilling to negotiate sliding scale,” Horazuk said. “We’re going to continue to advocate for a sliding scale health care plan.”

AFSCME tried to discuss a sliding scale model during direct bargaining with the University and during meetings of the Benefits Advisory Committee this fall, Horazuk said. She said the unions first proposed the idea during the summer.

The BAC is a group of faculty, staff and retired employees that deals with benefit issues for non-union University employees.

Morrison, a committee member, said AFSCME members passed out fliers with information on the sliding scale model at BAC meetings — but they didn’t raise the issue with enough time to actually implement it if the University accepted it.

He said a project like a sliding scale premium system would require extensive planning before implementation.

“It needs to be raised much earlier,” he said.