Teachers union battles Sacramento City Unified over health benefits

The Sacramento City Teachers Association has gone to battle with the city school district over switching health insurers for a large share of teachers and retirees without collective bargaining.

The decision, in the works for much of the past year, is expected to save the Sacramento City Unified School District between $6 million and $8 million in reduced premium costs for the district’s five large labor groups representing workers, including account clerks, secretaries, classified employees and plant managers. Four of the five groups agreed to the change.

The SCTA did not, however, and SCTA members this week were livid, calling the switch unilateral and illegal.

More than 70 past and present educators attended a school board meeting Thursday night, and many of them lambasted trustees for not following the collective bargaining agreement. Retirees said they are alarmed over an online and payment process instituted for claims, worried that they will have to pay higher costs and uncertain about how those changes will affect the oldest among them.

“I admit I’m angry,” said retired teacher Wanda Au. “Honor the contract. If you were in my class, you would all get Fs.”

District officials say employees will see no reduction in benefits, most employees won’t need to change doctors, and reduced costs will help counter the huge unfunded liability in future retiree health benefits.

The district reports its health benefit costs for current and retired workers have risen about $13 million in four years, to $86.9 million as of June 30. The district reduced its number of workers during that period. The district’s total budget is about $400 million.

“The district has over $600 million in unfunded liability health care obligation,” Trustee Jay Hansen told the educators after hearing their comments.

He warned that the cities of Stockton and San Bernardino are going bankrupt. “That’s not what I wish to see for Sacramento,” said Hansen, one of three trustees the teachers union is trying to unseat in the Nov. 4 election.

During next month’s open enrollment, about 4,000 employees, including teachers, nurses, counselors and school psychologists, will be asked to choose among Sutter Health, Western Health Advantage or Kaiser for their insurance coverage. About 53 percent of all district workers have Kaiser. SCTA members alternatively have been able to choose Health Net, which will no longer be available.

The district’s former chief business officer made the benefits switch earlier this year as part of a larger effort to reduce district health care costs for the combined employee groups.

There is disagreement over whether the teachers union knew a change was in the works. District officials have said SCTA was aware of the proposed health benefit switch but unwilling to negotiate. SCTA said the issue was never on the table.

SCTA leaders say they filed grievances over the summer once they learned the district had acted. And some speakers at Thursday’s board meeting warned that a lawsuit won’t be far behind.

“I think that the district administrators and the current school board should have thought very carefully about what the consequences were of their actions,” SCTA President Nikki Milevsky said Friday. She said SCTA believes the decision “can be reversed.”

Superintendent Jose Banda said that when he arrived on Aug. 1, it was already too late to change course.

“I was told that these changes had been made and … this was going to help us in the long run,” Banda said. “I was also informed that it was already done, the decisions were made. We couldn’t back out. That’s what I communicated to SCTA.”

Banda’s arrival in Sacramento appeared to help thaw a frosty relationship between SCTA and the district office. The union and former Superintendent Jonathan Raymond had an adversarial relationship before he resigned last year. In contrast, Banda has characterized the district and the teachers as being part of a “partnership.”

He called the benefits conflict a setback.

“We do want to negotiate with SCTA as much as we can,” he said. “This is the decision that was made, so we’re gong to have to live with the consequences.”

The health benefit issue has become one more arrow of frustration it intends to use against three trustees in the upcoming election – Hansen, Jeff Cuneo and President Darrel Woo – by blaming them for not blocking the chief business officer’s decision.

At the end of Thursday’s meeting, Hansen said he, too, has had questions about the change in recent weeks. But when he said an SCTA representative was part of the broker interviews last January, some meeting attendees began yelling at him.

District officials say that an SCTA representative was present at an interview to change insurance brokers and must have known about the consequent switch from Health Net.

Earlier this year, the Sacramento City Unified School District bargained with four employee groups – United Professional Educators, Classified Supervisors Association, Teamsters and the Service Employees International Union – to quit using CalPERS to manage health care benefits. The district’s broker then researched new options for insurers.

Call The Bee’s Loretta Kalb, (916) 321-1073. Follow her on Twitter @LorettaSacBee.