GASB Update for State and Local Leaders of Public Employees Case Study: Education Presented by Julie Washington, United Teachers Los Angeles National Labor College Silver Spring, MD September 1, 2009

Health and Benefits Committee (HBC)consists of all LAUSD Unions and includes District representation. UTLA CSEA AALA SEIU (99) Teamsters School Police Sergeants Building and Trades Each union has one vote and the district has one vote when decisions are made.

Agreement between LAUSD & Unions/Associations Representing District Employees Health and Welfare

Facts Agreement covers calendar year 2009 through calendar year Preserves lifetime benefits for new employees but, changes eligibility requirements. Increases the role and accountability of the HBC. Commits participation in HBC until January 1, 2012.

Lets’ look at some important features concerning the Calendar years

District contribution Calendar Yr Calendar Yr Calendar Yr Projected Cost$ 944m$1.029b1.123b Estimated Contribution $930m$963m$996m

Calendar Year 2009 Maintain present coverage choices with no increased co-pays. District contribution will be 930 million November 2008 Population: Participant type # of participantsCost per participant Actives72,648$9, Retired Pre 65 6,733$13, Retired Post 65 27,274$

Calendar Year 2009 cont. Any unspent balance shall be carried over. If costs exceed the balance shall be deducted from 2010 balance.

Calendar Year 2010 Districts contribution increases by % (963m). Total $ contribution increase is dependent on increases or decreases of participants: Participant type # of participants Cost per participant Actives?$9, Retired Pre 65 ?$14, Retired Post 65 ?$6, District contribution = participants x cost

Calendar Year 2010 cont. Snap shot of participants taken in November HBC must present a Health Care Plan that does not exceed projected district contributions by August 1, If the HBC does not then the Dispute Resolution procedures are followed.

Calendar Year 2010 cont. There are three basic circumstances that would trigger the Dispute Resolution Procedures. 1.Disagreement about projected costs and if it will fall within the projected district contribution. 2.District claims change is illegal. 3.District claims planned change is inequitable and/or have adverse impact.

Calendar Year 2010 cont. Dispute resolution Disagreement about projected costs & contribution. Will go to expedited arbitration process 3 panel members: Union, district and neutral (mutually agreed upon or from list of Ca. State mediation and conciliation service.) Time certain of 5 work days from 8/1 and panel to provide written decision no later than 3 work days after hearing. If the ruling is for the district, the HBC will have 7 work days to change plan design to fall under projected district contribution. If the HBC fails to do so the panel shall prescribe its own amended plan.

Calendar Year 2010 cont. Dispute resolution District claims change is illegal. District must notify HBC in writing with legal authorities and reasoning. HBC must either respond within 5 days defending it’s position or propose new action which complies with districts legal opinion. The district will notify the HBC within 5 working days of it’s opinion on the legality. The HBC must comply with the districts legal opinion.

Calendar Year 2010 cont. Dispute resolution District claims planned change is inequitable and/or have adverse impact. The district must notify the HBC as soon as possible. HBC & District may agree on a mediator or request one from the Ca. State Mediation and Conciliation Service. The mediation shall take place no later than 10 working days after the selection of a mediator. The mediation shall last not longer than 1 day. The mediation will give verbal opinion right away and provide written opinion no later than 3 days after mediation. The parties shall consider mediators opinion but if no agreement the HBC’s plan change would be implemented.

Calendar Year 2010 cont. Dispute resolution If there is a delay and the district incurs costs in excess of it’s total contribution the HBC must take action to provide recovery of costs. If the HBC fails or refuses to take action to contain costs with in the District contribution the District may implement premium contributions through automatic payroll deductions or other means necessary to contain costs. All unspent funds will carry over. If the actual costs exceed the Districts contribution then the amount shall be deducted from the Districts contribution of 2011.*

Calendar Year 2011 Districts contribution increases by % (996m). Total $ contribution increase is dependent on increases or decreases of participants: Participant type # of participants Cost per participant Actives?$9, Retired Pre 65 ?$14, Retired Post 65 ?$6, District contribution = participants x cost

Calendar Year 2011 cont. Snap shot of participants taken in November HBC must present a Health Care Plan that does not exceed projected district contributions by August 1, If the HBC fails to contain costs at or under District contribution level then the Dispute Resolution procedures are followed.

Calendar Year 2011 cont. The last year (2011) covered in this agreement has the following provisions:* If no agreement for calendar year 2012 the districts contribution level will be that of The district will then have the power to unilaterally implement premium contributions or other means to contain costs to the 2011 contribution.

Potential Shortfalls Consultant/District shall report to HBC and all unions on a quarterly basis the status of the Health Fund. Any two consecutive reports that project a shortfall triggers the HBC to act. If there is disagreement then the dispute resolution procedure and expedited arbitration process apply.

Preserves lifetime benefits for new employees but, changes the eligibility requirements.

New Employee Retiree Benefits Effective April 1, 2009 Service and age must equal 85. Minimum of 25 years of consecutive years of service.*

How Gasb is addressed Flexible cap on districts contribution Decrease number of eligible employees Acknowledgement that future issues with Gasb will be addressed

New Employee Retiree Benefits cont. Please refer to Article XVI, section 4.0 & Article XII A break of service does not include:* Authorized leaves examples include: Illness, industrial injury, pregnancy, family care etc… Any time between intervening between resignation and reinstatement with full benefits within 39 months.

Increases the role and accountability of the HBC.

Role of HBC Consultant mutually selected… if can not agree then HBC recommendation goes to the board for approval. HBC responsible for all plan designs. All vendor contracts shall be negotiated by the HBC.