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Union claims Island County missed chance to save hundreds of thousands in health insurance expenses

Members of Island County’s largest union are upset that county officials missed a deadline to give notice that the union wanted out of a health insurance pool, which the union said could have saved the county hundreds of thousands of dollars a year.

“The commissioners missed the deadline, but it kind of penalizes us at the bargaining table,” said Vinnie O’Connor, the staff representative for Local 1845.

Commissioner Helen Price Johnson said that missing the deadline was unfortunate, but it was just one strategy the county and unions were working together on to cut health insurance costs and still provide employees with insurance that’s affordable and will work for their families.

“Working collaboratively, we can still get to where we need to go,” she said, adding that there’s a lot of misunderstanding floating around the county and employees will likely be satisfied when they learn about the details of insurance options.

Still, it’s clear that a mistake by county officials has complicated ongoing negotiations with the union and means they missed out on what may have been the best way to cut costs.

During the budget process for 2011, the commissioners cut nearly $2 million from the budget to balance it, but that was predicated on the hope that the county would be able to significantly cut medical insurance expenses in negotiations with the unions. If that didn’t work out, Budget Director Elaine Marlow warned that more cuts could be ahead.

O’Connor explained that the 165 members of the union are insured through the Washington Counties Insurance Fund / Washington Counties Insurance Pool. He said the union realized a couple of years ago that the insurance pool is the most expensive insurer in the state, so they suggested the county could save money by looking at other carriers. He said former Human Resources Director Larry Larson wasn’t interested.

But that changed after Larson was terminated and interim Human Resources Director John McFarland came in earlier this year. He worked with the unions to set up a medical coverage committee to look at options. As O’Connor explained it, the objective was to find comparable coverage at a cost savings for the county.

And indeed, a hired broker identified a couple of plans that had comparable benefits, but would save from $380,000 to $530,000 a year depending on the options, according to the union.

But then the deadline was missed. McFarland, who worked part-time as the interim director, explained that he sent the commissioners a letter to sign in order to give the insurance pool the required notice that the county may pull out. After the deadline, he called Mike Shelton, the director of the insurance pool who happens to be a former Island County commissioner, to discuss the matter with him and found that he hadn’t receive the letter.

It turned out, he said, that the commissioners had assumed he would send the notice and he had assumed that they would. It’s an error McFarland takes responsibility for.

“I did my best, but it wasn’t good enough,” he said. “I don’t feel good about it. I have a great deal of remorse.”

McFarland immediately mailed and emailed the letter to Shelton. He said he had been communicating the county’s intent to Shelton all along, so he felt that being three days late with the notice shouldn’t matter.

Shelton was on his side, McFarland said, but the insurance pool’s board voted not to accept the notice.

“They did not make any friends with the commissioners or my office when they pulled that stunt,” he said. “I’m sure we’ll all remember it next year.”

McFarland admits that the county could have saved some money if the deadline wasn’t missed, but he’s not sure of the figure. But he said it would have been a big rush to change providers in the time they had; switching would have required a more thorough analysis and education of the union members. Both he and Price Johnson emphasized that the unions can still look into other insurers for 2012.

While he agrees that the missed deadline was unintentional, O’Connor said many of the union members are very angry. The union members overwhelmingly turned down a contract that included a health care plan that changed the county’s monthly contribution from 85 percent to a flat-rate maximum of $859. That would amount to a significant salary cut, especially to those employees with families on the medical plan. The union and commissioners, however, disagree on exactly how much more it would cost employees. The county and the union are currently in mediation.

O’Connor said the county should be more flexible in finding places to make the budget balance.

“They are trying to save all the money on people’s health care and not looking at other avenues,” he said. Last year, the union preserved the health plan by instead agreeing to all the members taking 2.5 hours of furlough a week, but the furloughs aren’t continued into the 2011 budget. O’Connor said a combination of furloughs and closure days, like many other counties have done, could balance the budget.

But Price Johnson said the commissioners are committed to getting the skyrocketing cost of health insurance under control.

“We need to get the costs in line so health care is not cannibalizing the rest of our budget,” she said.

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