South Miami union contracts could negate health insurance action [The Miami Herald]

Aug. 28--South Miami commissioners tried to save taxpayers some money earlier this month when they voted for an employee health insurance plan that kept premiums flat while cutting benefits.

But the city could still have to shell out the money, because the changes would breach previous agreements with the city's unionized workers.

So even though commissioners said they didn't want to pay any more in premiums, the acting city manager already is signing employees up for a plan that maintains the benefits promised in the union contracts. That will cost the city an extra $77,000.

According to an Aug. 21 opinion from the city's labor attorney, James Crosland, "the agreements must remain status quo until either changed through agreement in negotiations or through statutory impasse procedures."

Commissioners voted 5-0 on Aug. 17 to renew the city's employee insurance plan with AvMed.

Insurance broker Gene Baynon presented the group with three alternatives:

--A plan that increases premiums 13.5 percent and keeps benefits at their current level.

--A plan that increases premiums 8.8 percent and makes slight benefit cuts.

--A plan that keeps premiums flat but makes significantly deeper cuts in benefits, mostly through higher deductibles and co-payments.

A committee of city staffers recommended that the commission go with the first option.

But, faced with a million-dollar budget shortfall and other financial problems, commissioners said they wanted the third option.

"We're playing a zero-sum game here," Mayor Philip Stoddard said, adding that no department head wanted to pick workers they'd be willing to cut. "So we're going to be laying off workers or reducing benefits."</p>

Commissioners Brian Beasley, Velma Palmer and Walter Harris said they preferred the third alternative. "I think Option Three is stringent enough for this year," Beasley said.

Vice Mayor Valerie Newman, however, said the city should go further and reduce its financial burden by splitting the costs with employees. "The city cannot pick up 100 percent of the cost based on these numbers," she said.

Currently, the city pays about $370 per month for each of the 127 full-time employees enrolled in its insurance plan's health maintenance organization options.

After much discussion, commissioners unanimously chose the third option.

They also instructed Acting City Manager Randy Witt to negotiate with union and nonunion staff to work out a cost-sharing agreement that would increase employee contributions to as much as 25 percent of the total cost.

At a special meeting Aug. 19, the group voted 3-0 to keep dental, vision, long-term disability and life insurance coverage the same. Newman and Palmer were absent.

Witt said Tuesday that, given Crosland's opinion, he is signing employees up for the plan that keeps benefits at current levels.

He also said that, because the language of the Aug. 17 resolution did not explicitly mention an "Option Three," the commission unintentionally voted simply to renew the city's plan with AvMed.

Assistant City Attorney Mark Goldstein said Wednesday that, so far, commissioners have not directed him or Witt to set up renegotiations with the unions.

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