Posted on 03/14/2011 7:10:34 AM PDT by Second Amendment First
In freeing school boards from bargaining with employees over anything but inflation-capped wage increases, Wisconsin lawmakers might have opened the floodgates for districts seeking to drop coverage by the state's dominant - and highly controversial - health insurance provider for teachers.
WEA Trust, the nonprofit company started 40 years ago by the state's largest teachers union, currently insures employees in about two-thirds of Wisconsin school districts. The company's market dominance has dropped in recent years, although not as much as some school officials who complain about the company's costs would like.
After switching the district's nonunion employees to a different health insurance carrier, Cedarburg School Board President Kevin Kennedy said his school system is likely to look at cost savings by doing the same for its unionized teachers after unsuccessful attempts in previous years.
"It's such a large-ticket item; it's such low-hanging fruit," he said. "You can lay off an aide or increase your student fees, but that doesn't make up such a magnitude of saving as insurance does."
The survival of WEA Trust's health insurance corporation will depend on its ability to compete with other providers that have more pricing flexibility and a greater range of services, said Dale Thoma, managing partner for insurance broker Willis of Wisconsin Inc. Until now, the insurer was negotiated into contracts by adamant union leaders.
"They're going to have to compete in a different, more wide-open arena," he said. "That's what other insurers deal with, and their ability to respond to that and just compete, I guess, will ultimately determine their position in the market."
Because WEA Trust is named as the carrier in so many school district contracts, it has been largely shielded from such competition in the past, said Andy Serio, a group health insurance consultant.
"There literally is no competition if you're named in the collective bargaining agreement, so that would be the most dramatic effect on WEA," he said. "Because clearly, if you're in a collective bargaining agreement, you're in."
At the beginning of this fiscal year, last July 1, the Brown Deer School District began using a different carrier after years with WEA Trust. The district saved $170,000 in just one year - the equivalent of at least two teachers.
But Steve Lyons, director of public affairs for WEA Trust, said the company is named in only one-third of the school district contracts where it provides health insurance. And of those, in about one-third of contracts it is named as the "standard-bearer," meaning that districts can switch to other carriers if they can find substantially similar plans at lower costs, he said.
That shows, he said, that the company did not have an unfair advantage, as some critics have contended, based on the company's ties to the Wisconsin Education Association Council.
"What happens at the local level is, in the past, prior to the budget, is the local school boards would bargain with the local union and they would come to a consensus and often they chose us," Lyons said.
"We're very competitive in pricing and have been and continue to be."
Lyons also said in an e-mail that the insurer returns 93 cents out of every health care premium dollar back to the districts in health care coverage, while "some of our for-profit competitors keep more than 20 cents out of every dollar."
But Emily Koczela, director of finance for the Brown Deer School District and a former Shorewood School Board member, said the company regularly resorts to methods other than competitive pricing to keep its business.
Earlier this year, the Brown Deer district's teachers union filed a complaint with the Wisconsin Employment Relations Commission over the district's decision to switch from WEA Trust. Koczela suspects the move was aimed at protecting the insurance company rather than the employees' benefits, which she said remained the same with the lower-cost carrier.
"They don't know how to compete," she said. "Their way of competing to get my business back is to sue me. That's not how you get business back."
She said she expected the company will encounter a similar reaction from other business managers who have had difficulty in dropping the company in the past, even when they thought they had a contractual right.
"They've provided good service to the teachers, but they haven't provided good service to the people in the business office who sign their contracts," Koczela said.
I expect the union tactic is now to harass and intimidate school board members in order to keep the contracts.
Their family members, houses, cars etc are targets, too.
That Crashing noise you just heard is another gravy train coming off the tracks!
Good deal. Continue to defund the unions.
Milwaukee is paying $22,000 per teacher per year for WEA Trust health insurance.
When other Wisconsin school districts dropped WEA Trust, they got health insurance for around $15,000.
The Wisconsin Democrat politicians will be asking for foreign donors since their union slushfund is drying up.
So when do they end compulsory withholding of union dues?
Unless the new law has a specific effective date, I would think compulsory withholding has already ended.
I wouldn't assume that, but in terms of getting this union to start acting rationally, cutting the cash flow is the first thing to do.
And I wonder what tactics will be used by the unions against those who decide they no longer want union dues deducted from their paychecks....
“We’re very competitive in pricing and have been and continue to be.”
YOU LIE!
I think it starts in about two months, according to what I read somewhere last week. That’s about typical for how quickly government can move.
It will be interesting how much the unions will have to spend on workers to process checks, bank deposits, statement reconciliation and collections. Once they hire the people to process these, will they be able to keep them from organizing their own union? I enjoy it when union employees try to organize, and the union must fight them as “employer”.
How true. They have been held like hostages in a pitch black room. Now that the lights have been turned on, they will see the true extent of their former captivity.
Good. This should be a national movement. It has been over twenty years since the SCOTUS ruling Communications Workers v. Beck made compulsory union withholding of campaign funds illegal, but it has not been enforced in the spirit of the ruling. As things are, a worker must request that the funds NOT be withheld, which, given the thuggish behavior of union leadership, can be a hazardous thing to do.
This is an old game re health insurance and other benefits for government workers and those getting pay checks from so called non profits.
About 15 years ago I took early retirement financed by me and the corporation I worked for. My share of our health insurance was a fair sized monthly nut.
During that first year of not working, in a moment of weakness, I volunteered to be a board member for a so called non profit and ended up on their financial committee.
My wife had served in a similiar position with an east coast version of this non profit a couple of decades before. At that time the non profit did good things in the local community.
The current local version, I was hijacked into was the total opposite. It did nothing for the local community besides hand out brochures asking for money.
Over 80% of their contributions went to paying the local Exec and asst Execs and their underworked over paid office managers, called secretaries in profit organizations. Most of what was left, went to the state and national organization.
They were giving themselves incredible raises each year, had a pension plan they didn’t contribute to and beyond a Cadillac health plan. They were funding this high pay style by using the donations and siphoning off what had been a generous endowment fund established when the non profit did a good job helping the community.
About 3-4 months into this nightmare, their expensive health plan projected costs for the next year more than doubled, and on top of that potential freebie, they wanted 10% raises during a recession when 1-2% were the standard, if any, in the local industries.
I had some good support in the finance committee and on the board. We told them no way on the proposed raises and increased costs of their health plan.
We came up with an option with Kaiser, where they paid $100 per month of the costs and a good sized co pay and a 2% raise for the office managers and a pay freeze for the execs. The board backed us and some sanity came in for a few months, and our suggestions were approved.
Of course I was not asked to stay on the board when my first year was up. The sane board members tried to keep our finance committee, but it was dissolved by the Execs and their token hand puppet board members. Years later, they have moved out of a modern office to a place in the industrial area with about half the employees. Their endowment fund took hits during the Clintoon meltdown, the Pelosi/Reid melt down and of course in our latest and enduring Pelosi/Reid/Obobzo meltdown.
A CPA friend, who served on the financial committe with me, said the local organization, unless it gets some big donations might last until the end of the year.
Besides being very slow to post my reply, for some reason my recipient list didn’t get posted.
http://www.freerepublic.com/focus/news/2688475/posts?page=16#16
WEAC insurance is nothing less than a money laundering scheme for unions and Democrats. I have first hand experience with this issue at my local school board. Every year we could not get competitive health insurance bids because the school board always went along with the teacher’s union. The SB used to tell the public that there was nothing that could be done because they already had a contract with the union that prohibited competitive bids.
Now, there will be no cover for the these union loving school board lackeys. The union’s “basic human right” to have a monopoly to sell health insurance to school districts will now be gone. Boo hoo! It’s so unfair.
Thanks for the illustration Dave. It’s because of these kinds of abuses that my charitable giving is 100% to The Salvation Army.
I would expect they could be quite horrific to whomever the make an example.
Those union fully paid junkets need peon funding.
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