WFSE/AFSCME files grievance to recoup diverted health funds

The Federation yesterday (May 27) filed a grievance challenging the state’s diversion of $216.3 million in surplus health funds that this year added about $1,500 in your health costs. 

The Federation grievance alleges the state violated the Health Care Benefits article of its contracts by not contributing its full 88 percent share. (Most other public employers pay 100 percent of premium costs, according to the state’s latest salary survey.)

The grievance asks that the 40,000 employees covered by Federation contracts get at least 12 percent of the recouped amount—or about $26 million plus interest. Employees pay 12 percent of premium costs.

The $216.3 million surplus in the Public Employees Benefits Board Unrestricted Fund Balance came about because employees didn’t file as many claims. State employees did what they’ve been asked to do—take steps to stay healthy to avoid going to the doctor.

But instead of passing that savings along to employees, the Legislature in 2008 instead deliberately drained the full $216.3 million surplus and used it for other parts of the budget, the grievance says.

The union alleges this meant the state lowered the premium costs only for the employer, below the 88 percent negotiated in the contract.

“By lowering the funding rate, only for the employer, instead of allowing both employees and the employer to benefit from the surplus, the employer reaped the entire benefit of the $216.3 million surplus and improperly diverted the funds to benefit other portions of the state budget,” the Federation grievance says.

“At the very minimum, 12 percent of the surplus belong(s) to the state workers who helped create the surplus.”

The diversion set off a chain of events that added to the economic sacrifices inflicted on state employees. Out-of-pocket costs—deductibles, co-pays, prescription costs—skyrocketed this past Jan. 1. It took an all-out push by Federation members to win an infusion of $65 million from the 2010 Legislature to avoid another round of out-of-pocket hikes in 2011.

The grievance was filed with the state Labor Relations Office and officially received by LRO Director Diane Leigh.

This is not the first time the Federation has filed grievances defending the Health Care Benefits article of its contracts. The state and the Federation in 2006 settled grievances on another underfunding episode, winning some $55 million in recouped funds. That settlement brought lump-sum payments of $756 to all bargaining unit employees in 2007.