Summary of OSBA Health Insurance Trust Changes

Sample Letter to Union for Interim Bargaining

The OSBA Health Insurance Trust Committee's recent actions limiting the available insurance plans options as of in October, 2003 have collective bargaining impacts for districts with current union contracts and district’s presently bargaining contracts.

Most union contracts specify the carrier (Regence Blue Cross, OEA Choice, Pacificare, etc.) as well as the coverage (i.e. plan or benefit level). With the OSBA Trust Health Insurance Committee’s action to eliminate some plans after October 1, 2003, union contracts that specify plans that will be eliminated need to be reopened. Even if the union contract does not specify the exact plan, there is still an obligation to bargain the impact because insurance coverage is a mandatory subject of bargaining.

This information was created to provide general advice on how to move forward with actions regarding labor contracts. OSBA urges districts to consult with an attorney or labor relations consultant on any specific changes.

Districts with Current Union Contracts

The redesign of the OSBA Insurance Trust plans triggers ORS 243.702 which allows for the renegotiation of invalid provisions in collective bargaining agreements(1). The statute(2) states that in the event an employer is unable to perform to any words or sections of a collective bargaining agreement then, upon request by either party, the invalid words or sections of the collective bargaining agreement shall be reopened for negotiation. The elimination of an insurance plan would create a true inability of the district to meet the terms of the contract.

The renegotiation of health insurance benefits, however, does not constitute a complete reopening of the contract but only to the specific words or sections of the contract that refer to the specific benefit being eliminated. For example, a elimination of an insurance plan would not trigger renegotiation of salary or extra duty contract provisions. It does trigger the specific words and sections in the insurance article, including the selection of plan, benefit levels, and perhaps, the amount of district contribution and employee out-of-pocket costs. The exact scope of negotiations will depend on the actual language in your contract. If you have questions, call OSBA for clarification.

The statute (ORS 243.702)(2) directs the parties to use the interim bargaining process for the renegotiation which can be completed within a 90-day time period (ORS 243.698)(3). Remember, in order to use the interim bargaining process, the district must give a written notice to the union (exclusive representative). If the union does not respond within 14 days of its receipt of that notice then the union waives its right to demand to bargain. If the union does demand to bargain, the 90-day period starts with the receipt of the notice. If there is no agreement within that 90-day period then the district may implement its proposal without any further obligation to bargain.

These timelines are important because of the effective date of the plan changes: October 1, 2003. Working backward from the October date, the district should send notice to the union no later than July 1, 2003. Remember, the 90 day negotiation period starts with the receipt of the notice by the union. The notice can be hand delivered to the association president and/or the Uniserv Consultant. If hand delivery is not possible, a letter with return-receipt-requested should be sent so that there is documentation of the receipt of the notice.

Some contracts have an article or re-opener provisions that have shorter timelines or different notice requirements. Be sure to examine your contract to see if there are provisions outside of the insurance article that may be applicable.

Insurance committees are sometimes created to make recommendations about plan and/or carrier selection. Check your contract to determine if committee recommendations are required before any plan change can be made.You may need to constitute the committee in conjunction with the 90-day bargaining period.

Many contracts include a Severability or a Separability clause or article. These articles act similarly to ORS 243.702 cited above. Check the wording of these clauses or article to determine your obligations. Remember, a collective bargaining agreement cannot violate a statute. Call you labor consultant or OSBA for advice.

Districts Bargaining a Successor Contract

Districts that are in the process of bargaining a successor agreement need to adjust proposals to reflect the changes in the insurance plan redesign. Ideally, a settlement will have to be reached on the insurance plan or at least an interim plan pending completion of negotiations. If bargaining continues past October 1, 2003 then the status quo obligations for the district will come into question. Since the insurance plans are to be discontinued, the district will not be able to maintain the status quo until bargaining is completed.

Some Districts may have already reached a tentative agreement on the insurance provisions in their successor agreement. A withdrawal from a tentative agreement can only be done with good cause. The discontinuation of an insurance plan described in a tentative agreement would be ample justification to meet the good cause standard set by the Employment Relations Board.(4)

Interim Bargaining Process Flowchart (117k )

Footnotes

OSBA's financial programs are available to all Oregon school districts, education service districts and community colleges who are members of OSBA.