Beware of Illegal Parity Health Insurance Proposals by Employers

In a twist on illegal wage parity proposals, the Department of Labor Relations (DLR) issued Complaints of Prohibited Practice against the Boston Public Health Commission (Commission) for proposing and insisting upon an unlawful health insurance parity clause. (Read the full text of the DLR Complaint dated March 26, 2014 HERE). The Charging Party was the Boston Emergency Medical Services, a division of the Boston Police Patrolmen’s Association (Union) which represents Boston EMTs and Paramedics. The Union was bargaining over its contract which expired on June 30, 2011 where health insurance was a key topic in protracted negotiations with the Commission. The Commission is, by statute, independent from the City of Boston and a separate employer under Chapter 150E. After the parity complaints were issued, the DLR also ruled that the Commission failed to bargain in good faith with the Union when it changed the employees’ health insurance plan design and unilaterally increased their co-payments in violation of Section  10(a)(5)  of Chapter 150E. (Read the full text of the DLR Hearing Officer’s Decision and Order dated June 25, 2014 HERE). The BEMS-BPPA was represented in negotiations and litigation by Sandulli Grace Attorneys Ken Grace and Jenni Smith.

As we all know, employee health insurance costs are constantly changing to the point where any pay raise we may bargain can be quickly cancelled by increases in health insurance premiums, deductibles and co-payments. That is why it is so important for unions to fully exercise their bargaining rights over possible changes in health insurance plans, carriers, providers, benefits, coverages, premiums, premium contributions, co-payments and prescription co-payments. In this case, the Commission sought to have all of these health insurance matters be decided by another employer and another union.

The proposal at controversy stated that “the Union hereby agrees that any decision of the City of Boston to make [health insurance] changes, and the impact of those decisions will not require bargaining between the parties provided that such changes are implemented for the City of Boston’s Boston Police Patrolmen’s Association bargaining unit or successor.” The proposal, which ties the health insurance of BEMS to the collective bargaining future of the BPPA, constitutes a parity clause. The proposal, therefore, is an illegal restriction on the ability of both the BEMS and the BPPA to effectively represent the interests of their union members. For the BPPA, the proposed parity clause places illegitimate pressure upon their collective bargaining process, because they would be forced to take into account an additional group of employees whose interests and concerns do not mirror the sentiments of their immediate union members. In turn, the BEMS would be barred from representing the interests and well-being of its members on a mandatory subject of bargaining- – health insurance.

Over the last few months, the Union finally reached a collective bargaining agreement with the Commission and I’m happy to report that the contract does not include the illegal parity provision that was the subject of the DLR’s Complaints last March. The Commission was forced to withdraw its proposal because of mounting legal pressure. The contract settlement contained some small adjustments in health insurance co-payments and premium contributions consistent with those applicable to City of Boston employees, but the changes were not made retroactive. This amounted to considerable savings to BEMS employees over more than a three year period when premiums were lowered on the assumption of the higher co-payments. It was one of those rare instances where the foot dragging by an employer in delaying a contract settlement actually benefited the employees. Just as significant, however, was the Union’s willingness to take on the Commission through legal action and bargaining strategy in order to protect its important right to negotiate over all matters of health insurance in the future.