WERC Guidance on Budget Bill’s Health Insurance “Plan Design” Collective Bargaining Restrictions

February 27th, 2012

In a closely watched case, a divided Wisconsin Employment Relations Commission (WERC) held that a police association’s attempt to bargain over a health insurance plan’s deductibles was prohibited under language included in the new Budget Bill.

The newly-created Wis. Stat. § 111.70(4)(mc)6 prohibits bargaining over “the design and selection of health care coverage plans” and the impact of such design and selection on employee wages hours and conditions of employment.  This prohibition applies to all public sector unions, including public safety unions.  Since the passage of the budget bill, unions and municipalities have disagreed about the meaning of this language.

In WPPA & Eau Claire County, Dec. No. 33662 (WERC, 2/12), the union proposed the following language:

The Association fully acknowledges the right of the Employer to choose the carrier and to establish the plan design. Should the employer design or choose a plan design which includes a deductible, the employees shall be responsible for paying the first two hundred fifty ($250)/five hundred dollars ($500) of the deductible.

The County contended that such a proposal was contrary to Sec. 111.70(4)(mc)6. The union argued that the question of who pays the plan deductible fell within an exception found in a legislative note, which permitted the bargaining of “employee contribution requirements for offered coverage.”

In holding that the union proposal was a prohibited subject of bargaining, WERC concluded, on a 2-1 vote, that the phrase “contribution requirements for offered coverage” plainly referred to employee premium cost and not the potential additional cost of a deductible payment. The majority reasoned that “the very essence of ‘plan design’ is making decisions which steer insureds in a particular direction and encourage various behaviors.” As such, decisions regarding co-pays and deductibles are “integral parts” of plan design and are, therefore, prohibited subjects of bargaining.

It is not known whether WPPA intends to appeal.  We will continue to monitor and update you on this and other cases concerning the Budget and Budget Repair Bills.

For more information about the recent changes in municipal labor law, please contact Drew Cochrane at 608.259.2627 or dcochrane@staffordlaw.com.

Filed Under: Government Law, Employment and Labor Law

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