St. Paul teachers' health insurance move threatens budget

Votes by St. Paul's teachers and educational assistants to move from their current health insurer to a state-run plan are creating a multimillion-dollar headache for the district.

That is because the switch — if it occurs in January, as proposed — would come in the middle of a two-year contract between the district and HealthPartners and could trigger a $4 million early termination fee to be imposed by the health insurer.

Members of other unions also could face premium increases of up to 22%. Some are outraged. Patrick Mulvaney, a custodial engineer, recently told school board members that the St. Paul Federation of Educators (SPFE) and Teamsters Local 320 — the two unions that voted for the change — were spitting in the faces of other employees.

Superintendent Joe Gothard and Board Chairwoman Zuki Ellis also have sent a letter to SPFE President Nick Faber asking that teachers reconsider the move: "Simply stated, the school district does not have the ability to withstand these sudden, unexpected and unbudgeted costs," they wrote.

As of Friday, SPFE leaders and members had yet to be swayed. They say they are attracted to the potentially lower costs, and greater stability, of a move to the Public Employees Insurance Program (PEIP).

At the July 23 board meeting, and again this week, they recommended that the district negotiate with HealthPartners to waive the $4 million penalty or that HealthPartners simply elect not to assess it — or, at the very least, meet the union halfway, Faber said Friday.

The argument brings to mind SPFE's stance in a previous round of contract bargaining in which it stated that corporations and nonprofits should pay more to support schools. The district and the union agreed then to work together to pursue new sources of revenue for the state's second-largest district, with the biggest move since that time being a successful effort in November to persuade voters to fund an additional $17 million-plus a year for schools.

The district, in turn, is asking the union to delay the switch to PEIP for one year to January 2021.

Twelve other district bargaining units also weighed in again in separate correspondence to school board members Friday, urging the district to do all it can to minimize impacts on employees they say bear no responsibility for the potential harm caused by a broken deal with HealthPartners.

"To say your employees (our members) are angry and anxious about their health care for 2020 would be an understatement," the letter states.

State law gives public employee unions the right to elect to move to the PEIP plan. But Laurin Cathey, the district's human resources director, said at the July 23 school board meeting that such action was not envisioned during the middle of a contract period.

On Thursday, SPFE and HealthPartners leaders met to discuss the penalty issue. Faber said the union noted then that because HealthPartners is among the insurance carriers available to employees under PEIP, the insurer still could be providing coverage for many of its current SPFE members.

On Friday, HealthPartners spokeswoman Becca Johnson confirmed that the meeting took place but said HealthPartners had nothing to add beyond a statement issued a week ago that read: "We are hopeful that we'll continue to serve the employees of the Saint Paul Public School District. If the district moves to terminate early and transition to PEIP it will trigger an early termination fee under the contract."

Faber said the union has yet to craft a response to the Gothard-Ellis letter seeking the one-year delay in the PEIP move. Conversations continue, he said, adding that a decision to overturn a membership vote "is not something that happens quickly."