Health care access and costs are top issues in the presidential campaign and top of mind for many Americans. So it's not surprising that the St. Paul Federation of Educators (SPFE) wants to switch to a cheaper health plan. Estimates say that some members of the teachers union could save as much as $175 per month by dropping HealthPartners and buying into the state's less costly Public Employees Insurance Plan.
But the timing of the union's move could also force the school district to pay a $4 million early-termination fee, as well as raise premiums for members of other unions in the district. That's not a cost the district should be forced to absorb. Paying the $4 million penalty would eat up nearly a quarter of the $17 million the district raised through a voter-approved levy just last fall.
St. Paul Public Schools spokesman Kevin Burns said the teachers union voted to switch plans halfway through the two-year contract the district has with HealthPartners to provide insurance to all 6,000 district employees. Included in that contract is a provision that allows HealthPartners to levy a $4 million penalty if the district breaks the contract.
Under state law, public unions have the right to move to the state plan. But as a district official said during a July 23 school board meeting, that kind of switch isn't expected during the middle of a contract period. To avoid paying the penalty, district officials have asked the union to delay changing providers for one year. That's a reasonable request under the circumstances.
In an interview with an editorial writer, SPFE President Nick Faber explained that his members voted to change plans for several reasons. Switching would provide more affordable health care for members — particularly for some lower paid paraprofessionals — and a wider choice of plans for members in the future. SPFE also argues that HealthPartners is a nonprofit with $7 billion in revenue and that the company does not pay taxes to help support education and can afford to waive the penalty.
But after talks with both the union and the district, HealthPartners maintains that it will not waive it.
If the 4,200 SPFE members who work for the district leave the HealthPartners plan, the remaining 1,800 district employees would face higher premiums because costs would be spread over a significantly smaller pool. Understandably, leaders of the 12 bargaining units that represent those employees have urged the district to protect their members.
It's not unusual for employee groups and employers to change health plans, but there are appropriate times to make those shifts. The St. Paul district's contract with HealthPartners includes a timeline for the service in part so that all parties to the deal can budget their costs. That's why there are penalties for breaking the terms of the agreement. Certainly the teachers federation, or any other collective bargaining group, would be howling if the district choose to cancel or reduce benefits midway through the contract period.
The union should reconsider its decision and do what's right for the district by honoring the terms of the district's contract with HealthPartners.
