[S]tarting next year Vermont’s teachers will negotiate their health care benefits at the state level, in a major concession from the state’s teachers union, which staunchly opposed the move during last year’s legislative session.
In exchange for giving up local negotiations over health care plans, teachers will get an equal number of seats at the table during negotiations over the design and cost of those plans.
The creation of a new commission for negotiations and the reform of the Vermont Education Health Initiative, the nonprofit body that administers the plans, were included in H.16, the budget bill negotiated between Gov. Phil Scott and the Legislature.
Scott has refused to sign the bill but said he will let it pass into law at the end of the week.
The Vermont NEA announced in April that its members had agreed to the shift to statewide negotiations in exchange for a more favorable composition of the decision-making bodies involved in the process. AFSCME, the association of municipal employees, put forward its own proposal.
“The writing was on the wall,” Darren Allen, communications director for the NEA, said Tuesday of the governor’s plans to set “arbitrary” cost levels and premium shares in statute, a possibility that motivated the union to move toward a compromise.
“It protects the ability of members, the people covered in the health insurance, to have a say in the plan design,” Allen said of the new bill, which will pass into law at the end of the week. “It keeps our members front and center.”
Last year, Scott’s veto of the budget bill over his demand for a statewide teacher health care contract led to a lengthy dispute that nearly resulted in a government shutdown.
The NEA had previously said that shifting to a statewide negotiation could cost teachers dearly, as some had agreed to lower salaries in exchange for better health care packages in the past.
While the governor backs the broad strokes of the shift to statewide negotiations, which he believes will save tens of millions of dollars per year in school spending, the administration was adamantly opposed to at least one of the changes.
Both the administration and the Vermont School Boards Association lobbied to keep the composition of VEHI in favor of the boards, because it is local districts who will ultimately pay for the decisions made by the body.
“That is the piece that our organization was clear that it did not support,” Nicole Mace, executive director of the VSBA, said of the VEHI board changes. “Our position throughout the session has been they [school boards] have the risk, so they ought to carry the majority on the board.”
Michael Pieciak, commissioner of the Department of Financial Regulation, made the same point during testimony before the House and Senate in recent months, but said on Tuesday that the department was now focused on getting VEHI members ready to do their job.
Because the new law also prevents people directly employed by school boards or the union from serving on VEHI, two of the current members will need to be replaced, Pieciak said.
“We’ll see how it plays out, regardless of where they come from, the board members have a fiduciary obligation to the entity,” Pieciak said. “We’re optimistic that they are going to follow through on that.”
Both Pieciak and Mace added that it was highly unusual that the Legislature would mandate the composition of a nonprofit board.
“It’s pretty extraordinary, frankly, that the Legislature is dictating to an independent entity what the board structure can be,” Mace said.
Sen. Phil Baruth, D/P-Chittenden, who chairs the committee that drafted the bill, did not dispute that, but noted that previous changes to the VEHI board, which gave boards the majority, had been mandated by the executive branch of state government.
“This was an issue that had a thousand thorns,” Baruth said of the statewide benefit. “So yes, if you’re chair of the board of VEHI, you don’t want the state involved, and yet DFR was the one who forced the change originally.”
VEHI has had a 50/50 composition for most of its existence, Baruth noted, and during that time developed a strong reputation for responsible management.
The board structure shifted in favor of the board a few years ago in response to changes made by the Affordable Care Act, and then moved to its current 4-1 seat allocation in 2016. Baruth said that with only one seat, the NEA couldn’t even get its motions seconded during board meetings.
The legislation establishes a new 10-member committee to negotiate the benefit, also with a evenly split composition. If that committee fails to reach a consensus, disputes would move to a fact-finder and then to arbitration. If the two sides can’t agree on an arbitrator, it will be selected by the American Arbitration Association.
Baruth said that mechanism was put in place because of trust issues related to the Vermont Labor Relations Board that have arisen from the Scott administration’s handling of a dispute with the Vermont State Employees’ Association earlier this year.
“This route looked cleaner, sharper and more efficient,” he said.
Baruth added that during a time when cooperation in Montpelier is so rare, the final version of the statewide health care benefit had found near consensus after starting with three separate proposals just a month and a half ago.
“I think it’s a small example of the fact that we can get something together,” he said. “We can make change, even in the toughest policy area.”
Pieciak said his department is already working on changes to rules regarding VEHI, and will soon engage new members to get them up to speed on their roles and responsibilities on the board.
The first contract under the new regime will be negotiated next year and take effect in 2020.
