Avoid insurance problems early with joint committees

The usual strategy of “negotiated tradeoffs” isn’t the best way to plan health care benefits these days, especially when everyone should agree to share the burden of rising costs.

More boards and unions are getting their heads together another way, through Labor-Management Insurance Committees. A committee dedicated to insurance can take the time to really understand and explore the complexities. They can get the best buy and the buy-in from the union.

“Insurance committees create trusting relationships and better communication with employees from the beginning,” says Brett Yancy, Budget and Finance Director for Springfield SD. “You also end up doing what’s best for your employees, avoiding rumors and educating employees about how they impact costs.”

Springfield’s insurance committee does the hard work – creating plan designs and recommending carriers – so all the board and union need to do is bargain how much premium (cap) the district pays. “We can avoid rumors like ‘the district increased our premium’ by sharing how claims experience actually increased the premium.”

Labor-Management Insurance Committees are created through your union contract. Composition, structure, participants and purpose are determined through negotiations.

Among the major considerations:

  • Each party should appoint an equal number of members.
  • The committee’s charge should be stated in clear, unequivocal language.
    Clearly state committee authority, e.g., to “make recommendations, publish a report, make operational decisions.”
  • Stating specific procedures is directly related to the committee’s power. Advisory committees are usually able to agree internally on how the group functions; but if committees make decisions, this process is specified in the contract, e.g, “All committee decisions shall be by a majority vote of a quorum of the voting members appointed to the committee.”
  • Define the committee’s chair. Co-chairs (labor/management) are common.

The most common purpose of an insurance committee is to explore and recommend various insurance carriers and plans to get the best buy. They can also review quarterly reports on how members are using benefits to track trends; explore self-insurance and research member needs and opinions, and act as a “sounding board” for employee ideas.


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