The President's Message

Nov 30 1999
President's Message

Sometimes it just isn't much fun to be president of the union. This last week has been one of those times. The reason is simple: health insurance. As you are all amply aware by now the most recent bid for health insurance was awarded to Medica.

1.Although in many there is some good news in this, in many ways I am just not pleased and neither are many of our members. Let me give you some background.

During last year's protracted negotiations, one of the difficult matters to handle was that of health insurance. Of course that is not only a difficult matter here, it is a difficult matter across the country. It seems that at every state meeting I attend I spend a lot of time speaking with people who are upset about insurance. Some districts are experiencing increases of over 50% for plans which are no longer affordable. Although the situation hasn't been that bad in Duluth, it hasn't been a whole lot better either.

2. It is worth remembering that the main objective of negotiating health insurance is to provide the most we can while spending the least we need to. 3.Health insurance costs come out of the same pot as do salaries, hence large increases in health insurance reduces that which is available for salary increases. Yet all membership surveys indicate a desire on the part of the members to have a strong plan of health insurance. In an effort to provide such a plan while still allowing for acceptable salary increases, we agreed to what we felt were two things. The first was to change the base plan from the J Plan level of benefits to Aware Gold, thus saving money. The second one was to allow the district to bid out the plans. It was felt by both parties that unless there was competition, we would face substantially increased premiums. The vehicle for consideration of any changes was to be a labor- management committee which would operate on a consensus basis seeking out alternatives to our present coverage and structuring a bidding process.

4.Here is where the problems arose. It seems very apparent to us that the district sought to utilize this labor-management committee as a vehicle to push through bids with little or no concern for the desire of the employees or the resulting effect on coverage. Language provided that a change must be made to a base plan which would be actuarially equivalent to Aware Gold. As well it was our opinion --which we felt was backed by the state mediator- -- that all plans offered would have to be actuarially equivalent to that which was in place

5.The district brought in a consultant who structured the bids and the district's representatives pushed the bids through the committee without bothering to achieve the consensus to which we had all agreed. When the bids came back it was apparent that the Medica equivalent of Aware Gold was less expensive. Blue Cross initially came through with a bid calling for an increase in premiums which was close to 30% The Medica bid was much more favorable. Unfortunately the other plans, most especially the Medica equivalent of Blue Plus was not as good as Blue Plus and was almost as expensive as the Medica equivalent of Aware Gold. We notified the district that we were in disagreement with the process as it was utilized and the outcome. We requested that the district not bring the bids to the school board for approval until some very important issues could be addressed. 7. Nonetheless the school board approved the bids and the district requested arbitration of its own decision.

We are left with the strong feeling that the district planned for arbitration throughout the process and began preparing for the arbitration as the committee did its work.

In the arbitration both parties agreed that the Medica version of Aware Gold was actuarially equivalent to Aware Gold. In fact our own actuary indicated some degree of superiority to the Medica plan. The bulk of the arbitration hinged around what we felt was the necessity of the district providing an actuarial equivalent to Blue Plus. In fact, had the district agreed to have the Medica offering in place of Aware Gold, while maintaining Blue Plus, there would have been no need for an arbitration.

We lost the arbitration. Interestingly enough much of the language on which the arbitration hinged had been in place since the mid-1980s. We felt there was sufficient past practice to sustain our arguments. Unfortunately the arbitrator disagreed.

Thus the results are somewhat mixed. Although it is true that the Medica offering in place of Aware Gold, which is our base insurance plan, is a good plan--at least according to our actuary--it does have some definite drawbacks. However, the cost differential should provide additional dollars to be used for salary schedule now and in the future should this plan remain in effect. The real downside is the loss of the Blue Plus as the Medica plan is NOT equivalent to Blue Plus and does not offer enough of a cost difference to encourage people to opt into it from our base plan of insurance.

8. There are many ways that a person can look at this result. One way is from the perspective of negotiations where it is true that we have continued to maintain a base plan of insurance for all employees which is a substantial plan. Although we are more comfortable with BlueCross than Medica, Medica is used by many locals across the state. We have somewhat contained increasing costs of health insurance, however, there are other costs. Like so many of you I find that I will be reacting to this change on a personal basis. No longer will I, with single coverage, be able to utilize the monies made available by dropping down to Blue Plus for other purposes. The doctors who I have seen for nearly 30 years are not a part of Medica. I may have to go elsewhere. It would be an understatement to say that I am not pleased and I am sure there are others who are even less pleased. Many people with family insurance will find that it is advisable to remain with the base plan thus their present monthly costs are increased substantially. Others may find specific provisions within the new plan that are not to their liking. Many people are unhappy

Yes, health insurance is a problem, Yes, costs must be addressed 9. Yes, money spent on insurance cannot be used for salaries. Yes, we still have an excellent insurance program by comparison to other districts. Yes too we have lost something. We have lost some of our options and we have lost some trust. 10, It will be very difficult in the future to envision a cooperative relationship with the school district given the way that they have dealt with this issue. One of our retirees put it very well to me today when he said: "I guess once again it just proves that the district thinks about money a lot more than the people who work for them and the people who have worked for them for such a long time."

Frank Wanner




1. Yes there is much good news but sit back and enjoy watching Frank emphasize the bad news.He has to do this because he has spent a decade telling his teachers that there was no way they dared to change their insurance carrier. Now that it is changed Frank has lots of angry teachers. To maintain his own credibility he must discredit the District and suggest that he was tricked and cheated. The insurance concession was the only thing that made this contract bearable. Afterall, Duluth teacher pay and benefits increased by 11 percent (over two years)  compared to a state-wide average increase of 9 percent. This year ISD 709 will spend almost one million dollars more than it will take in as revenue. And now we have to settle another contract! How much will this one cost?
2. Gee Whiz. This has been the School Board's position for ten years. I'm glad to hear Frank finally agree with us.

3. Ditto











4. Here is where the BS gets thick.







5. Frank is saying that the union expected to have "veto" power over this process. Baloney! The School Board would never have agreed to this because the union would never have had the courage to permit a change after years of propaganda telling its membership that the Blue Cross plans were untouchable.





7.The DFT knew this was the price that the School Board demanded to avoid a strike no matter how much they now want to deny this portion of the agreement. The Bureau of Mediation Services made it clear to both sides that once actuarial equivalency was demonstrated the bidding could begin. The BMS upheld that decision when the Union objected.


















8. Wait! Let me guess. Frank will "look" at the result and discover that the teachers were cheated. Oh, silly me. That was too easy.












9. If Duluth teachers still have an "excellent insurance  program" why is Frank so bitter?


10. What constitutes the "District?" Is it the Superintendent that can't be trusted? Is it the new majority of six Board members that Frank has described as "friends." Can't they be trusted? Is it the voters who elected the School Board, or the taxpayers, or the parents of school children? How about the teachers themselves? Aren't they part of the school District? I'd really like to know who the teachers can't trust. Maybe they can't trust themselves. Can they trust Frank? Isn't he part of the District? I don't trust myself to figure out the correct answer.