The WPPA Wins Major Appeal On Ability Of Police To Bargain Share Of Insurance Deductibles

On October 25, 2012, for the second time in less than a week, the WPPA’s in-house legal staff achieved another major appeal victory overturning a recent decision by the Wisconsin Employment Relations Commission (WERC). This latest ruling confirms that Wisconsin’s new collective bargaining laws allow public safety employees to negotiate with their employers over the share or allocation of costs of a health insurance plan’s deductibles. Given the importance of this issue to law enforcement officers and their families, the impact of this latest litigation triumph stands to be very far-reaching.

Until the enactments of the “budget repair bill” and “state budget bill” in 2011 (Acts 10 and 32, respectively), all public employees had the ability to bargain over every facet of health insurance, including the insurance companies, doctors, procedures covered, the design of the plans, and the degrees to which employers and employees shared the responsibilities for the various costs of health care coverage. While Act 10 eliminated nearly all of the collective bargaining rights for non-public safety employees, it was Act 32 that made it a prohibited subject of bargaining to discuss “the design and selection of health care coverage plans by the municipal employer for public safety employees, and the impact of the design and selection of the health care coverage plans on the wages, hours and conditions of employment of the public safety employee.” Wis. Stats. §111.70(4)(mc)6. Despite this new and severe restriction on our members’ rights, the legislative motion to implement it explicitly stated that “employee required contributions…would still be collectively bargained.”

In 2011, the Eau Claire County Deputy Sheriffs Association, a WPPA affiliate, attempted to bargain a successor agreement to its previous contract, which had expired at the end of 2010. Mindful that the design and selection of the health insurance plan were now off the table, the WPPA made the following proposal during bargaining:

“The Association fully acknowledges the right of the Employer to choose the carrier and to establish the plan design. Should the Employer design or choose a plan design which includes a deductible, the employees shall be responsible for paying the first two hundred fifty dollars ($250) / five hundred dollars ($500) of the deductible.”

Eau Claire County objected, claiming that even discussing a responsibility for the share of the deductible was an unlawful imposition on their right to design and select the health insurance plan for their deputies. The County also argued that such a proposal amounted to bargaining over the impact of the County’s design and selection of the health insurance plan, which the new law also prohibited.

In the first case of its kind in Wisconsin under the new bargaining laws, the WPPA argued before the WERC for a declaratory ruling in its members’ favor. On a 2-1 decision, the WERC concurred with the County and generally held that while municipal employers must bargain with their public safety employees about who pays the costs of the premiums for a health insurance plan, the issue of who pays the costs of the deductibles under a plan was prohibited.

The WPPA immediately appealed the WERC’s decision to the Dane County Circuit Court, arguing that while deductibles are part of the design of a health insurance plan, the responsibility for paying the deductibles is not. In agreeing with the WPPA’s argument, Dane County Circuit Court Judge Juan B. Colás wrote that “as long as the deductible is paid it makes no difference in the plan (or to the insurer) who has paid it.” Since that responsibility of how a deductible is paid is outside of the plan, he reasoned, it remains a proper subject for collective bargaining.

Judge Colás further ruled that since the issue of deductibles is not a part of the design of a health insurance plan, there was no need to consider the question of whether the WPPA’s proposal was an attempt to bargain the impact of the insurance plan’s design. That question had become moot.

This latest holding is consistent with a another recent decision over a similar issue by Milwaukee County Circuit Court Judge Dominic Amato, which held earlier this year that both premiums and deductibles are component parts of the overall cost of healthcare, and deciding how to share those costs should continue to be the subject of bargaining. Though the Milwaukee County case was filed after the WPPA’s challenge in Eau Claire County began, it went directly to circuit court, as opposed to the WERC. The WPPA opted to strategically first test the WERC, with two of its three commissioners being newly appointed by Gov. Walker, as that represented the most efficient way to establish a statewide ruling to benefit all of its members. Both cases will be the subject of appeals, meaning that a higher court will soon be tasked with ultimately settling this dispute once and for all.

Despite the WPPA’s enormous achievement, we fully appreciate the monumentally detrimental changes forced upon police officers by Act 32, and how health care coverage plans will be designed in the years to come. Among other issues, municipal employers still have the unilateral power to choose the health care provider, what is covered and what is not, and the overall cost of the insurance. It is fair to assume that all of these changes will result in significant cost savings for Wisconsin’s municipal employers, and as such, the Legislature’s intent of reducing the costs and expenditures of local governments will still be realized. By allowing public safety employees to bargain over their contribution towards both the premiums and deductibles, there will be some reasonable end point for how far the local governments can take such cost-saving measures, and such bargaining will give public safety officers the voice at the table that they deserve when it comes to negotiating how much their health insurance will actually cost them and their families.

As with any case, we stand ready to defend our victory in this case to whatever lengths are necessary and to fight to preserve the statutory rights of our members and all those who belong to Wisconsin’s law enforcement community. The dedicated men and women who keep our streets safe, along with their families, must confront a great deal of uncertainties in the performance of their duties; most prominent among them is whether the officers who leave their homes each day to provide for the safety of others will return home safely themselves. The benefits and costs associated with a police officer’s health insurance should not be among those uncertainties. The WPPA exists to protect and promote public safety, and the interests of all those who serve to provide it. Our record of continuing success on a variety of fronts effectively demonstrates our ability to fulfill that mission.

The litigation in this matter was led by WPPA Staff Attorney Andrew Schauer, with the assistance of arbitration consultant Dick Terry, local association representative Gary Graveson, and several others on our staff.

For more information about this case or any other in which the WPPA is fighting for Wisconsin’s law enforcement officers, please contact WPPA Executive Director Jim Palmer at palmer@wppa.com, or check this page for updates on developments as they occur.

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