By statute, all public employees receive health insurance coverage through the Employer Union Trust Fund. The public sector unions, e.g., UHPA, HGEA, cannot negotiate the coverage or the carriers, but the Employer’s contribution to the premium payments are subject to bargaining. The Employer (State) has said they are not willing to contribute any more money to the EUTF. Currently, the Employer pays 60% of the HMSA PPO premium, which is the base for all other options, such as Kaiser. The EUTF actually purchases the insurance coverage from Kaiser, but they “self-fund” the HMSA PPO, so HMSA administers the benefit payments but doesn’t underwrite the insurance. Three years ago, the EUTF established a reserve fund to pay out the benefits and has used money from that fund to hold down the premium increases. Now the reserve fund is depleted and the insurance costs will increase. The Kaiser increase will be approximately 10% on July 1, 2009, but the EUTF’s consultants have said to maintain the current benefits after July 1st, the premium for those selecting HMSA will need to be increased by 29.4%. About half of the increase is due to the consultant’s determination that the reserve fund must be increased for active employees in the HMSA PPO plan.
The EUTF Board is meeting tomorrow, Wednesday, February 25th. The Board is split evenly between labor and management. It is important that the Employer’s (management) representatives hear from faculty members about the need to maintain health benefits at their current levels. Also, the public sector unions are united in supporting the position that the State must continue to contribute at least 60% to the premium costs, regardless of the increase in premiums. The unions also believe that the self-funding of the HMSA health insurance is a bad idea, and that the EUTF should purchase insurance from HMSA, as they do the Kaiser plan. The HMSA’s community-based premiums are scheduled to increase 12%, as opposed to the 29.4% projected for the EUTF plan.
The issue of the premium increase and the benefits to be offered in the HMSA plan will be decided by the EUTF Trustees over the next few weeks. However, it is important for the Trustees to hear from individuals who are covered by the EUTF plans. This currently includes all public employees, except for the teachers represented by HSTA.
The question is simple, “Regardless of the premium costs; do you want the HMSA benefits to be maintained at current levels?” In order to reduce the premium increase, proposals have been made to reduce the benefits by introducing a front-end deductible. This means, in addition to the premiums you pay, you would pay $250, $450, or $850 out-of-pocket before the insurance would cover doctor or hospital costs. They would also reduce other benefits, so that the hospitalization reimbursements would be reduced from a 90% reimbursement by the insurance company to 80%.
Finally, the public sector unions are united in supporting the continuation of the current health insurance benefits for retired employees, and maintaining the State’s payment of the full premium for retirees who have qualified through their years of public service. In this regard, faculty members are treated exactly the same as all other public sector employees.
UHPA, HGEA, and UPW are all asking our members to write to the EUTF Trustees to express their views on this important issue.
Key messages for EUTF Management Trustees:
- Do not reduce benefits nor try to hide reductions through high front-end deductibles.
- Faculty members took employment with UH expecting good health benefits and their continuation. This directly impacts the ability to recruit and retain faculty into the University which is located in a high cost of living state.
- The self-insured trust should be closed out and unions given the right to collectively bargain over health insurance. It is clear that the only thing self-insurance has brought is potentially increased costs and risk to the public employees.
- The EUTF trustees should be advocating for the legislature to increase funding for health insurance. The Federal stimulus package is bringing money that will reduce the stress on Medicaid reimbursements. Public employees should not be left with less benefits and higher costs as stimulus funds become available.
The issue of the EUTF is being discussed more fully during the campus meetings that have been scheduled. See our website for the dates, times, and places for your campus.