Allina, nurse talks stall after daylong effort

Allina Health and union negotiators for 4,800 of its Twin Cities hospital nurses met Friday for the second time since a one-week nursing strike last month, but they failed to reach agreement on a new contract.

The day started with a new offer from the Minnesota Nurses Association, which proposed to eliminate two of its union-backed health plans for the nurses and increase their costs on two others, in the hope of finding compromise and preventing a second strike.

Both sides traded counteroffers throughout the afternoon, and Allina eventually agreed to retain two of the union health plans — which it called a "significant" concession given that it wanted to eliminate all four plans and switch nurses over to its corporate plans.

But talks stalled Friday night around who would pay for the rising costs of those union plans. The nurses had agreed to increases in their deductibles and copays, but Allina wanted to cap its responsibility for any cost increases in the plans to no more than 2 percent per year.

"Allina told us it wasn't enough," said Angela Becchetti, an Abbott Northwestern nurse who is part of the union's negotiating committee. "Their negotiators said Allina wants workers to bear the increases in health insurance premiums. They're still asking for money out of the pockets of nurses."

A statement from Allina spokesman David Kanihan expressed similar disappointment, noting that the union broke off talks despite the health system's concession to allow two of the union plans to remain. Both sides had reached agreement on 2 percent wage increases for the next three years and made progress on issues such as workplace safety efforts.

"We were prepared to bargain as long as necessary to reach a deal to bring this difficult negotiation to an end," the statement read.

The nurses made a concession of their own in their initial proposal, dropping a demand for fixed staffing ratios that the union believes is needed to ensure a safe minimum number of nurses per patient.

Ratios have been a thorny issue in past contract negotiations but received less attention this year when Allina demanded that nurses surrender their four union-backed health plans.

Allina has said it would save $10 million per year by switching the nurses off the union's older-style health plans, which charge high premiums but offer low or no deductibles.

The health system projects the savings in part through financial incentives that encourage employees to use lower-cost forms of care, such as generic drugs instead of costly brand-name versions.

Nurses rejected an Allina offer in June that would have eliminated all four union health plans, prompting the strike last month at Allina's Abbott Northwestern Hospital and Phillips Eye Institute in Minneapolis, United Hospital in St. Paul, Mercy Hospital in Coon Rapids and Unity Hospital in Fridley.

Halving the number of union health plans wouldn't eliminate a looming financial concern for Allina — the so-called "Cadillac" tax that takes effect in 2020 to help pay for reforms under the federal Affordable Care Act.

If the cost of premiums and other contributions exceeds $10,200 for an individual plan or $27,500 for a family plan, then the federal government imposes a 40 percent tax on every dollar above that threshold.

Allina's plans generally come with lower premiums and higher deductibles than the union plans, and health system officials believe they wouldn't hit the law's thresholds.

Under the union's new three-year contract proposal, only one of the two remaining union health plans would exceed the tax threshold, an MNA spokesman said.