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May 16, 2017

Vermont Teachers Should Send Their Union to Detention

As most Vermonters know by now, the legislature is in extended session trying to deal with the issue of teacher healthcare. The position the Vermont NEA, the teachers’ union, has taken puts job protection for union staff ahead of the interest of the teachers, the students, and the taxpayers. Teachers should tell their union to back off.

All involved agree that, because of provisions in the Affordable Care Act (aka ObamaCare), the current health plans the teachers have all must be changed or they will be classified as “Cadillac Coverage” and penalized. The need to change to health care plans means that every Vermont school district is negotiating health care with its employees at the same time. This synchronization creates a unique opportunity to combine all health care coverage for teachers in Vermont public schools into a single large contract which the state will negotiate both with the NEA and with the insurance carriers rather than individual districts, of which we have hundreds, negotiating separately with the union and the insurance carriers. Since there are only two insurance carriers in Vermont, leverage in this negotiation is important.

Governor Phil Scott, who proposed the plan being debated, has estimated that savings will be over $76 million/year, partially because the new plan – to avoid being a Cadillac plan – will have higher deductibles and copays. Scott has proposed that roughly $50 million of that savings be used to fund Health Savings Accounts (HSAs) for teachers, who will be able to use these HSAs to cover the higher deductibles and copays. In this way the teachers are held harmless even though they are losing their Cadillac plans. “Held harmless” is pretty good; Blue Cross, the biggest of the two health insurers left in the state is asking for a 12.7% increase. Most private sector employers will have to pass most of whatever Blue Cross is eventually allowed onto their employees.

The remaining $65 million of ANNUAL savings will relieve pressure on the education fund, which is mostly funded by property tax revenue from sky-high property taxes. TBD whether this savings is used to take pressure off other education programs which might have to be cut without this savings or is used for property tax relief (or some degree of both).

So the education fund benefits. The taxpayers benefit. And the teachers keep very generous health benefits without having to pay more. What’s more both teachers and students benefit from having local school boards concentrate on local educational issues rather than the esoterica of healthcare What’s the problem?

The teacher’s union apparently isn’t focused on the very real benefit to its members or the taxpayers. It is incensed that they will no longer get to spend expensive staff hours negotiating with every school district in the state over healthcare; they will only get to negotiate healthcare once with the state. BTW, all other negotiations stay local. So the NEA is adamantly against this plan. And the NEA is a big campaign contributor.

To its credit, the Vermont Legislature despite its overwhelming majority of Democrats and Progressives, has not given the NEA the support it probably thought it would get. There were enough Progressive and Democrat votes in the Vermont House to give the plan a one vote victory until the House Speaker cast an unusual vote to create a tie and kill the bill. The Governor has threatened to veto a budget which does not accomplish the goals of the plan he proposed. It’s clear that there are not enough votes to override a veto; the legislature is still looking for a compromise.

Linda Joy Sullivan, a former public school teacher and one of the Democrats in the Vermont House who voted for the savings, wrote the following on vtdigger.com:

“What Gov. Scott recently asked my colleagues in the Legislature was simply to allow the state, with its superior bargaining power, to negotiate a better deal. I was a bit skeptical about whether we will achieve $26 million in savings, and I knew that any tax savings would not have directly reduced property taxes, but I could not see how it wouldn’t have improved our ability to secure quality health care – full health care benefits for our teachers – at a far better cost.

“From a business perspective, it’s a no-brainer. If the plan was to downsize health care coverage for teachers, that would be one thing. I was not hearing that – I heard instead that the proposals under consideration had the support of Vermont’s school superintendent association and are supported by actuarial analyses that seek to better match our spending to experience.”

All of us Vermonters, teachers included, need to be in contact with our legislators this week to make sure union staff cannot put their interests before the interests of teachers, students, and taxpayers.

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