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Ask President Burrus

Question:

When I first read that the USPS will pay 95 percent of healthcare premiums for APWU-represented employees enrolled in the APWU Health Plan, I thought, “What a smart move.” I loved the ingenuity. As I read further, I became disappointed to learn it was for only the APWU Consumer Driven Plan. I also thought this was in violation of the resolution we passed recently in Philadelphia.

Resolution #122, passed at the union’s National Convention read as follows:

Resolved, That the American Postal Worker Union will oppose any wholesale changes to our current health insurance coverage that unduly restricts our choices, or that force us into consumer-driven, defined contribution plans that shift the risk and burden of catastrophically high medicals bills from the employer to employees.

Yet a recent article on the union’s Web site said the following:

Local and state presidents are being asked to help spread the word about an important gain in the 2006-2010 Collective Bargaining Agreement: the increase in the Postal Services contribution to health insurance premiums for those who enroll in the APWU Consumer Driven Plan. Healthcare coverage is one of the most important benefits a union can negotiate for its members, and the APWU Health Plans are among the best in the Federal Employee Health Benefit Program (FEHBP), President William Burrus wrote in a letter to APWU local and state presidents. Yet, for a variety of reasons, many APWU members are enrolled in other health insurance plans.

 

Why should the membership sign up for this plan? I think we said it best at the convention by passing the resolution that opposed any changes “that force us into consumer-driven, defined contribution plans that shift the risk and burden of catastrophically high medicals bills from the employer to employees.”

I believe you negotiated this against our wishes by not including the High Option.

So, why should we sign up for this plan?

Bob, Boston Metro Area Local

President Burrus:

Thank you for inquiring about the negotiated changes to the Collective Bargaining Agreement that affect employees’ healthcare premiums. Your question infers that the newly-negotiated provisions are in conflict with Convention Resolution # 122.

I disagree. The resolution adopted by delegates to the 2006 National Convention provided that the union would not “restrict our choices, or force us into consumer-driven contribution plans.” The newly-negotiated provisions neither restrict our members’ choices nor require them to join the consumer-driven plan.

During negotiations for the 2006-2010 Collective Bargaining Agreement, the APWU and USPS agreed to provisions that require the Postal Service to pay a greater percentage contribution to the APWU Consumer Driven Health Plan. However, these provisions do not require employees to enroll in the plan and do not restrict their choices for other plans.

The APWU High Option Health Plan was not included because the Postal Service refused to agree to any provisions that would increase its payments for health benefits. The reason we were able to achieve a greater percentage contribution for the Consumer Driven plan is because even with the 95 percent employer payment, the employer’s cost is reduced compared to other plans.

For example, the USPS contribution to the APWU Health Plan High Option Family Plan at the current 87 percent contractual rate is $380.01 bi-weekly. Assuming current premiums cost, a 95 percent contribution would increase USPS costs to approximately $415. On the other hand, assuming current premiums, a 95 percent contribution to the cost of the APWU Health Plan Consumer Driven Option would cost the USPS only $349.60.

I knew at the beginning of negotiations that without agreement on health plan contributions, we would not be able to reach a negotiated contract. I also knew that the last time we went to arbitration on this issue, the arbitrator imposed a 4 percent cost shift to employees, without any corresponding increase in benefits. (We also lost two Cost-of-Living Adjustments and received only two pay increases over the four-year period.) With that in mind, I concluded that it was in the best interest of our members to reach a compromise, if one could be negotiated.

I have repeatedly encouraged union members to select their health plan based on the medical condition of their families. Providing an option for the members does not limit their rights. The new provisions give an employee in the Consumer Driven Option whose family, for example, has four doctor visits and six prescriptions per year, the opportunity to reduce his or her health plan premiums by approximately $23 per pay period or about $600 per year, while having the family’s medical expenses paid in full. (These members currently pay premiums of $41.40 bi-weekly; assuming current premiums, next year that employee would pay premiums of $18.40 bi-weekly.)

In response to your direct question, members should sign up for the plan if it meets their medical needs because it requires payment in an amount far less than other plans.

No one is being forced into any plan. We have provided APWU members with an option that is worthy of serious consideration.

Aug. 14, 2007

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