General Membership Meeting Insurance October 14, 2013

Choosing PERS Between January and September, there were 10 meetings with the Insurance Committee or a subset to discuss carriers. We have been in California Schools VEBA (VOLUNTARY EMPLOYEES BENEFITS ASSOCIATION) for about 10 years. Three carriers were interviewed. – California Valued Trust (CVT) – California Schools Voluntary Employees Benefits Association (VEBA) – California Public Employees Retirement System (CalPERS) A decision was made to recommend PERS for our carrier.

Reasons for choosing PERS included: Variety of Plan Choices (11 instead of 3) Variety of Doctor Networks (5 instead of 2) Variety of prices which were generally lower – For example, there are 3 PPO options which are less expensive than the non-Kaiser HMO offered by VEBA. – United Healthcare HMO Family - $6,600 a year less for the same plan.

Negotiations Throughout the process, GEA was trying to negotiate better ways to cover insurance premiums. Our main focus was to create an insurance pool which would allow for a single contribution per unit members to be spread evenly across the unit. We also felt the contribution needed to be indexed so the contribution would not have to be renegotiated every year.

Pool Plan Proposals We proposed: – $11,000 per unit member contribution. Based on our VEBA placement, this would have allowed for $14,914 to be paid towards benefits. After moving in to PERS, this amount would likely be greater. – An indexing percentage equal to the percentage increase of actual money received by the District. The District countered: – $9,500 contribution per unit member with new hires only getting $6,000 contributed for them. This would be $120,000 less than they contribute presently. – No index.

Time Crunch We have been trying to negotiate insurance since last December, but we went right up to the October 1 deadline to get out of VEBA and we still had no word on insurance payout from the District. As we got closer to the deadline, we tried to have a bargaining session, but it was cancelled by the District.

Current Proposals On October 4th we proposed: – Increase the hard Cap to $10,000. – Keep the “family plan.” That is the plan where a family choosing the least expensive insurance plans will be fully covered. – Allow families and 2-parties that were in the “family plan” in 2013 to stay in Kaiser for 2014 and not incur a premium expense. We felt this would remain under the District’s budget for insurance. We also felt it was unfair to go this long to make a decision. Spouses already had to decide about their insurance options and it was difficult to make changes at this late date. On October 9th we met again and the District summarily dismissed our proposal.

What does this mean? We are presently status quo. The District will contribute $9,500 towards a unit member’s insurance premiums. In order for a family or 2-party to remain covered without a premium expense, they will need to change to Blue Shield Net Value HMO. This is the least expensive plan. Families that decide to continue coverage through Kaiser will be subject to the same $9,500 cap as other unit members.

What next? If we want change, we need to change the School Board. The current Board still wants concessions even though the District will receive over $2,000,000 more dollars this year under the new funding formulas. If the Board is changed, we can try again to negotiate fringe. Our candidates are sympathetic to the problem faced by our unit members in regards to fringe. A new board would be seated in December and the first time increased insurance premiums will be taken from a warrant would be the end of February 2014.

Right now we are status quo! – The District shall provide unit members with medical, dental, vision and basic life insurance ($20,000) benefits. Effective February 1, 2007, the District shall contribute a maximum of $9,500 per year towards these benefits. The unit member shall pay for costs in excess of benefit cap. – It has been the practice of the Garvey Education Association and the Garvey School District for unit members who need a family plan (more than 2 parties) to provide at least one plan without a premium expense to the unit member. – Unit members choosing the lowest family plan and lowest dental and vision plan will have their total cost for medical, dental, vision, and basic life insurance ($20,000) paid for by the District regardless of the $9,500 cap.