Over the last year, in conferences and on this blog, our firm has discussed an employer’s obligation to bargain over changes in terms and conditions of employment.  Minnesota has a long history of siding with employee representatives on issues of mandatory subjects of bargaining, and the list of subjects over which an employer must bargain has grown over the years.  In the case of AFSCME Council 5 and Hennepin County, the employer implemented changes to its health insurance following an impasse with its health insurance committee, and argued it was permitted to do so by the terms of its collective bargaining agreements.

In the collective bargaining agreement (CBA) between the parties, it was agreed that the parties would abide by the decisions of the County’s health care committee if a consensus decision on plan design and premiums was reached by August 31 of each year.  If the parties could not reach a consensus on plan design and premium, then County administration could implement decisions.

In 2022, the County sought a new third party administrator (TPA) for its health plans, and selected a group that closely resembled its previous TPA.  The County’s Labor Management Committee (LMC) met that year, but was not able to reach consensus on premium contributions.  In October 2022, after the consensus process was over the County learned that its TPA could not offer the plans as previously proposed, and informed the unions of the change.  It then set the premiums for the following year for the plans available from its TPA.

The following year, despite its knowledge that the TPA could not offer the plans provided under the previous TPA, the union grieved the change, claiming that the employer did not negotiate the changes to the health insurance plan, and it did not have the authority to modify the health insurance plan that was negotiated under the CBA.  The employer argued it was within its right to implement the new plan, as the LMC did not reach consensus, and that it took every step it could to reduce or eliminate financial harm to the employees due to the TPA’s changes.

In addressing the merits, Arbitrator Nancy Miller-Levin found that while the County was not offering the same number of plans as described in the collective bargaining agreement, the CBA provided for changes to health plans via the consensus process.  If the LMC had reached consensus on the plans, the County would have had no choice but to offer the same number of plans as before.

The Union also argued that even if the County did not have to negotiate the change in insurance, it had an obligation to negotiate with the Union over the effects of the insurance change, citing contract language stating as much.  The arbitrator found that the language granting the employer discretion on plan changes and premiums controlled, and noted that the issue of effects bargaining was not included in the original grievance, and could not be considered by the arbitrator.

With that, the grievance was denied.  Health insurance benefits and premiums are normally subject to negotiation, and unless you have strong language in place to allow for employer discretion, you will likely be at the table talking over the changes with your groups.  If you, or your organization need assistance at the bargaining table, contact Wiley Reber Law, for negotiations advice that works.