Union officials said the University will have overcharged workers who use its low-cost insurance coverage by approximately $6 million by the end of 2004.
The University, which offers its own health insurance coverage to workers, made estimates in 2003 to determine how much employees would have to pay to cover health care expenses. University staffers pay premiums based on those estimates.
The University’s director of employee relations and staff compensation Patti Dion said the union sees different numbers than the University.
“The bottom line is that all of these numbers are projected increases,” Dion said. “It’s just that the increase is not going to be as high as the projection was a year ago, but it still costs more. There’s no savings.”
The American Federation of State, County and Municipal Employees Locals 3800 and 3801, which represent 1,900 full-time clerical workers on four University campuses, and AFSCME Local 3260, which represents more than 170 health care workers in the Twin Cities, were all present during the health insurance re-opener negotiations on July 28 and August 4.
Those meetings between the University and unions aimed to determine whether the health care premium estimates from 2003 were accurate. AFSCME Local 3937, which represents 1,100 technical workers in the Twin Cities, sat in the negotiations as witnesses.
The first meeting was mostly an informational session, said Local 3937 President Candace Lund.
Dion said the mood had greatly improved since the 2003 sessions.
“During last year’s negotiations, the University came out very defensive,” Lund said. “It wasn’t like that on Wednesday.”
But after deriving their estimate of the University’s alleged overcharging, the unions asked for immediate action.
“We wanted to re-open negotiations on how that $6 million would be spent,” AFSCME Local 3800 President Phyllis Walker said. “The University is profiting from the health care (premiums) they charge their workers.”
Dion said it is against University policy to renegotiate existing contracts.
Before the 2003 negotiations, the University paid 100 percent of the low-cost coverage for individuals and 90 percent for families, but the University cut its contribution to 90 percent for individuals and 85 percent for family coverage in 2005.
That translates to approximately $72 a month for family coverage this year, and will increase to about $114 in 2005, Lund said.
“From our calculations, if the University just maintains its 90 percent payment for families, that will cost them about $4.5 million,” Walker said.
Lund agreed that the University should try to accommodate its workers.
“We were hoping because of their miscalculation, they might be flexible and show some goodwill,” Lund said. “They screwed up here and instead of sharing they’re choosing to make a profit.”
Dion said the University is not trying to be insensitive.
“The heart of the matter is that we went to the table in 2003 and bargained a two-year contract,” Dion said. “We came to this table, discussed the items at issue, and the session is over.”
