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Health Care amendment AgreeMEMORANDUM July 10, 2002 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Amendment to the Joint Labor Management Health Care Committee Agreement Personnel Manager Randy Peck is recommending approval of the Amendment to the Joint Labor Management Health Care Committee Agreement, which extends the terms through June 30, 2002. The Health Care Committee met on June 13, 2002, to discuss the future of the Committee. Personnel Manager Randy Peck advised the Committee that the City would be willing to extend the Agreement through June 30, 2003, with any bargaining unit that would agree to making certain modifications to the prescription drug co- payments. The Operating Engineer's Union, Teamster's Union, Transit Union and the Police Association all agreed to make the co-payment changes and, therefore, will be signatories to the Joint Labor Management Health Care Committee Agreement Amendment attached to this memorandum. The Firefighter's Association representatives expressed an interest in continuing with the Agreement, but would not agree to making the changes in the prescription drub co-payments. With the Firefighters Association, Health Care will once again be included in the collective bargaining process. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C Van Milligen MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Randy Peck, Personnel Manager CITY OF DUBUQUE, IOWA MEMORANDUM June 13, 2002 TO: Michael C. Van Milligen City Manager FROM: Randy Peck Personnel Manager SUBJECT: Amendment to the Joint Labor Management Health Care Committee Agreement In February of 1996, the City's bargaining units signed the attached Agreement that removes health insurance from the collective bargaining process and places the management of the health insurance program in the hands of the Joint Labor Management Health Care Committee. In April of 2001, the Agreement was amended to extend it through June 30, 2002. The Health Care Committee met on June 13, 2002, to discuss the future of the Committee. I told the Committee that the City would be willing to extend the Agreement through June 30, 2003, with any bargaining unit that would agree to making certain modifications to the prescription drug co- payments. The modifications to the prescription drug plan would include an increase in co- payments to $2.00 for generic drugs, $5.00 for brand formulary drugs and $15.00 for brand non- formulary drugs. The Operating Engineer's Union, Teamster's Union, Transit Union and Police Association all agreed to make the co-payment changes and therefore will be signatories to the Joint Labor Management Health Care Committee Agreement Amendment attached to this memorandum. The Firefighter's Association representatives expressed an interest in continuing with the Agreement, but would not agree to making the changes in the prescription drug co-payments. The Committee structure will include non-bargaining unit and management representatives and all bargaining units, except the Firefighter's Association. The terms of the Agreement will remain the same. Any future savings resulting from the actions taken by the Committee would be shared with employees in the form of modifications to the health insurance program. Fifty percent of the savings would be applied in this manner. There would be no sharing of risk on the part of our employees if the cost of health insurance is higher than we project. The formula for computing the savings threshold will also remain the same. The average annual increase in the projected per employee cost will remain at 5.7% in Fiscal Year 2003 and the success sharing formula will remain at 20% of the projected costs in Fiscal Year 2003. I recommend that the Amendment to the Joint Labor Management Health Care Committee Agreement be approved. The requested action is for the City Council to approve a motion approving the Amendment to the Joint Labor Management Health Care Committee. If you have any questions, please feel free to call. RP:bf Enclosure cc: Health Care Committee AMENDMENT TO THE AGREEMENT FOR JOINT LABOR/MANAGEMENT HEALTH CARE COMMITTEE CITY OF DUBUQUE The undersigned hereby agree to extend the terms of the "Agreement for Joint Labor/Management Health Care Committee" through June 30, 2003. Signed this __ day of , 2002. Amalgamated Transit Union, Local #329 City of Dubuque, Iowa Dubuque Police Protective Association Teamster's Union, Local #421 International Union of Operating Engineers, Local #758 AMENDMENT TO THE AGREEMENT FOR JOINT LABOR/MANAGEMENT HEALTH CARE COMMITTEE CITY OF DUBUQUE The undersigned hereby agree to extend the terms of the "Agreement for Joint Labor/Management Health Care Committee" through June 30, 2003. Signed this /day of 4,2 , 2002. ated Tran it Union, Loci'` #329 Dubuque Police tective Association International Un Engineers, Local n of Operating 758 Cit of Dubuque, Iowa 4-‘e-z4, Appendix 2 (Continued) Projected per Employee Costs: * Success Sharing begins at: * FY 2003 6383 5044 AGREEMENT FOR JOI)FF LABOR/MANAGEMEN-F HEALTH C~RE CO)~411-FEE CIl~ OF DU~QUE WHEREAS, the City of Dubuque offers a program of group health care coverage to its employees and their dependents through a self-funded arrangement; and WHEREAS, the cost of the health insurance program has been escalating rapidly to the detriment of the citizens of the City of Dubuque and all of the participants in the Plan; and WHEREAS, a consensus has been reached among the City of Dubuque, the certified public employee bargaining units and'their exclusive bargaining representatives, and City employees not'represented by a b~rgaining unit, that a Joint Labor/Management Health Care Committee appears to be the most effective method for dealing with the problem of maintaining quality health care while controlling escalating costs. NOW, THEREFORE, IT IS AGREED BElt~EEN AND AMONG THE PARTIES TO THIS AGREEMENT AS FOLLOWS: 1. The parties to this Agreement are: AMALGAMATED TRANSIT UNION, LOCAL #329; ~ CITY OF'DUBUQUE; DUBUQUE POLICE PROTECTIVE ASSOCIATION;. DUBUQUE PROFESSIONAL FIREFIGHTERS ASSOCIATION, LOCAL #353; GENERAL DRIVERS AND HELPERS UNION, LOCAL #421; and INTERNATION~AL UNION OF OPERATING ENGINEERS, LOCAL #758; provided that in case of a bargaining unit, the bargaining unit has at least one employee who is eligible for group health care coverage. Although non-represented employees of the City of Dubuque are non- participants to this Agreement, it is intended by the parties that this Agreement shall benefit such employees. 2. Each of the parties hereby agrees to .the provisions of the Group Health Insurance Plan (the Plan) attached hereto and incorporated herein as Appendix 1. 3. The Plan shall continue in force as the City of Dubuque Group Health Insurance Plan for a period of five years from July 1, 1996 to June 30, 2001, unless modified as provided in Paragraph 4. It is understood and agreed that if any provision of the Plan is prohibited or limited by law or any modification required by law, the necessary revisions to the Plan shall be made as required by law. A decision to renew this Agreement shall be made by October 15, 2000. upon the unanimous agreement of all of the voting members of the Joint Labor/Management Health Care Committee (the Committee) and approved, if necessary, by the City Council of the City of Dubuque. The provisions of this Agreement and the Plan may be modified only 5. Each of the parties represents that it has the full legal authority to enter into and be joined by this Agreement. 6. Committee shall be the exclusive forum for dealing with non-duty related health care issues under this Agreement and each of the parties 2 specifically waives any rights it may otherwise have under the Iowa Public Employment Relations Act or otherwise to bargain over the subject of health care insurance, or to impose other terms or to arbitrate concerning other terms for health care coverage or benefits. (a) The Committee shall be composed of 7 voting members appointed by the parties and up to 15 non-voting members appointed by the parties. (b) Each of the bargaining units which are parties to this Agreement shall appoint 1 of their members to be voting members; and shall appoint up to 2 of their members to be non-voting members; (c) The City Manager shall appoint 2 employees to be voting members, I as representative of Management and 1 as representative of non-represented employees, and shall appoint up to 4 employees as non-voting members; (d) The committee shall appoint 1 City of Dubuque retiree as a non-voting member; (e) The parties to this Agreement shall each appoint alternates, from the committee, who shall have the power to cast a vote in absence of the voting member. (f) A Member of the Committee shall be appointed for a term of 5 years unless sooner replaced by the party appointing the member. Recognizing the need for stability in the Committee, each of the parties and participating groups agree insofar as it is practical to maintain the same representatives on the Committee for the term o of this Agreement. If it becomes necessary to replace a previously designated representative, such party shall notify the co-chairs of the Committee in writing as soon as practical and not less than 5 days prior to any regular Committee meeting. (g) The Committee shall determine its own internal structure and operating procedure, including arrangements for subcommittees and the co-chairing of the Committee and subcommittees. The co- chair(s) representing Labor shall be selected~by the voting members appointed by the bargaining units and the co-chair(s) representing Management s.hall be selected by the voting members appointed by the City Manager. (h) The Committee shall meet on a regular basis not less than quarterly and more frequently if needs require. Additional meetings may be called as necessary at the diYection of co- chair(s), and written upon demand of any three Committee members submitted to the co-chair(s). (i) Employees shall be granted time off work to attend committee and sub-committee meetings and be paid at the appropriate rate when attending committee and sub-committee m~etings during off duty hours. '(a) The parties agree that any dispute concerning the interpretation or application of this Agreement between any two or more of them which cannot be resolved after good faith efforts shall be submitted to binding arbitration. It is understood that this provision for arbitration shall not apply to any dispute arising out of the operation of the Plan itself or to any individual claims or disputes under the Plan. (b) The parties to the dispute, by joint letter, shall request that the Federal Mediation and Conciliation Services (FMCS) submit to them a list of seven (7) arbitrators. The part~es shall meet within ten (10) days of receipt of the list and engage in mutual striking to select an arbitrator. Each party ~hall have the right to reject one entire list, provided such rejection occurs within five (5) days of receipt of the list. The parties shall alternatively strike one name from the list until there is one name remaining. The order of striking shall bM determined by Coin toss. The Selected arbitrator shall be notified by joint letter of the parties, requesting that a hearing be scheduled in Dubuque, Iowa, on.a mutually agreed date. (c) The parties to the dispute attempt to arrive at a joint stipulation of the facts and issues shall be submitted to the arbitrator. Both parties shall have the right to request the arbitrator to require the presence of witnesses and documents. Employees of the City called to testify at the arbitration shall be released from duty for such purposes without loss of pay or benefits. (d) The arbitrator shall have no authority to amend, modify, nullify, ignore, add or subtract from the provisions of this Agreement. The arbitrator shall consider and decide the issues presented.and provide for an appropriate remedy. The arbitrator's decision shall be rendered and delivered in writing to the parties within thirty (30) days of the close of the hearing or the submission of post-hearing briefs, whichever is later. Post- hearing briefs shall be filed simultaneously bY the parties on a date established by the arbitrator. (e) Fees and expenses of the arbitrator, the zost of the hearing room, and the cost of a court reporter to provide a written transcript for the arbitrator shall be sharedlequally by the parties to the dispute. If either party desires a verbatim record of the proceedings, the party shall pay for t~e cost of such copy. 9. The parties to this Agreement, in considerationiof their mutual undertakings and obligations, mutually agree that during the term of this Agreement, a collectively bargained agreement between andlamong: all of the parties, no provisions concerning the Plan, including butinot limited to its cost and benefits, shall be raised as an issue in any other collective bargaining agreement, contract or negotiations between the parties and the City of Dubuque. It is further understood and agreed tha~ this Agreement does not represent a collectively bargained agreement between the City of Dubuque and its non-represented employees. 10. Fifty percent of the savings obtained through ~he efforts of the Co~nittee shall be applied to health care related issues. The Committee, within its authority, and within established budget policy guidelines, shall 6 decide how the savings shall be applied to health care issues. "Savings" shall mean the difference between the goal established by the Committee and the actual costs associated with the provision of health care as defined in Appendix 2 attached. In the event the health insurance reserve is higher than necessary, as determined by an actuary or an underwriter, the difference between the reserve amount and the actuarial or underwriting determination shall not be considered in determining savings. The health insurance reserve shall not fall below the amount determined as appropriate by an actuarial or underwriting analysis. 11. It is understood and agreed that,' the City of Dubuque, being a municipal corporation, this Agreement and all actions, procedures and processes under this Agreement shall be subject to all of the statutes and ordinances governing the conduct of municipalities, including but not limited to requirements for bidding and contracting for the provisions of goods and services, and compliance with all legal provisions for equal employment opportunity and affirmative action applicable to the City or any other party. Signed this~-~O~day of AMALGAM~TE~RANSIT UNION, LOCAL #329 CI. WOF DUBUQUE DUB~UE POLICE,~RO.T~~EASSOCIATION DUBUQUE PROFESSIONAL FIREFIGHTERS ASSOCIATION, LOCAL #353 GENERAL DRIVERS AND HELPERS UNION, LOCAL #421 INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL #758 7 APPENDIX 2 City of Dubuque and its Unions Health Insurance Task Force Success Sharing Formula Results Formula: 50% success sharing begins in FY1996, mud continues at 8096 of the projected cost increase in the second year, 60% of projected in the third year, 40% of projected in fourth year, 20% of projected in the fifth year.: Illustration of Re§ults with Alternative Ass~ed iCosts Scenario (Assumes 500 active employees throughout t~e 5 years) Method C (5.7% averaqe'annual increases) 1996 1997 Projected per employee costs:* $4,330 $4,577 Success sharing* begins at: $4,330 $4,528 4% assLkmed costs scenario: $4,261 $4,431 1998 1999 $4,838 !$5,113 $4,683 i$4,790 $4, 09 I$4,7 3 2000 $5,405 $4,845 $4,985 city share: Employee share: $17,250 $24,250 $18,500 0 0 .$17,250 $24,250 $18,500 0 0 3% assumed costs scenario: $4t220 $4,347 $4,477 $4,611 $4,749 city share: $27,500 $45,250 $51,500 $44,750 $24r000 Employee share: $27,500 $45,250 $51,500 $44,750 $24,000 2% assumed costs scenario: $4,179 $4,263 $4,348 $4,435 $4,523 City share: EmPloyee share: $37,750 $66,250 $ 83,750 $188,750 $ 80,500 $37,750 $66,250 $ 83,750 $ 88,750 $ 80,500 ~ These figures include rredical (indu'a,ity andHvID) and prescription drug claims and stop loss premiums and administration fees for the rredical (indermity andHVD) and prescription drug plans. 3 AMENDMENT TO THE AG REEMENT FOR JOINT LABOR/MANAGEMENT HEALTH CARE COMMITTEE CITY OF DUBUQUE The undersigned hereby agree to extend the terms of the "Agreement for Joint Labor/Management Health Care Committee" through June 30, 2002. Signed this L'~/,L~/ day of ."~/~n'~t~amated Transit Union, Local #329 · 2001. Ci(y of Dubuque;,~ . Dubuque Policedt~otective Association Dubuque ~rofessional Fire Fighters AsSociation, Local # 353 T~#421 international Url~on of Operating Engineers, Local #758 Appendix 2 (Continued) Projected per Employee Costs: * Success Sharing begins at: * FY 2001 5713 4910 =y 2002 6039 4975