The Health Benefits Committee
Your AFT health benefits committee was informed on Wednesday, October 18 of some very disturbing news: our former insurance broker, Keenan and Associates, has been sharing inaccurate data with management, as well as the faculty and classified unions for years. This confirms what your AFT reps have been saying for years. In fact, we provided public testimony to the Board of Trustees in October, 2014 saying AFT had lost confidence in Keenan’s ability to provide reliable information to the Health Benefits Committee.
Finally, last spring, the District terminated its relationship with Keenan and Associates, and instead, has retained the services of a healthcare consultant--Burnham Benefits, with the support of both AFT and SEIU.
Burnham is working with us to gather information as consultants, but do not have a stake in any plan or carrier that the district might ultimately contract with. The District is paying Burnham for information and education and for their ability to find ways to save money on health benefits while maintaining our benefit levels.
At our first AFT/Management Health Benefits Committee meeting this year, your AFT reps immediately recommended that we survey the available options in the marketplace - especially when it comes to health care options for retirees who qualify for Medicare. Burnham was tasked with two primary jobs:
These meetings were going very well, and from what we have experienced so far, Burnham is professional, prepared, and transparent. This is a refreshing change; however, the news that Burnham delivered late last week has brought any hope of getting quick, accurate answers to our questions to a screeching halt.
As you can imagine, the answers to the primary questions we have asked of Burnham at this stage are intimately tied together. Understanding our options depends entirely on our demographics and claims data. The problem is that the demographics that have been provided to Burnham are inaccurate at even the most basic level.
Burnham has done some investigation and what they have found is that the data that was being provided to the District, and upon which Anthem has been basing our annual premiums, was inaccurate. As Burnham related to us, this situation is so bad, that at least one potential insurance provider has refused to even quote a cost to add the District because they have no way of accurately assessing their risk
To make matters worse, Burnham is so concerned about the inaccuracy of these numbers that they are recommending that all discussions of options cease, and all meetings of the joint committee be suspended until they (Burnham) can fully investigate the extent of the inaccuracies and independently certify our demographic and claims data are accurate. Obviously, it would be a complete waste 18 AFT 1828 of time to get requests for quotes since the data that they are based on is wrong.
According to Burnham, this data clean up will take at least six weeks of focused efforts, and then, only if the District fully cooperates to provide all the necessary information in a timely fashion. In light of this, AFT has agreed to cancel our regularly scheduled meetings until such time as Burnham is able to resolve this issue. The one small ray of hope is that Burnham’s representatives are confident that, provided the District and Anthem continue to provide access to the information, they can solve this problem.
A major ramification of the data errors relates to salary and health benefit negotiations. For many years, the District has bemoaned the cost of faculty health care benefits. They have claimed the tremendous burden that the rising costs of healthcare coverage has placed on the annual budget as a “justification” for refusal to offer any substantive progress on salaries during negotiations.
However, the stark reality is that, according to Burnham’s latest revelation, those healthcare costs are based on data that is, even in the most generous interpretation, inaccurate. Has the District been paying higher rates for insurance unnecessarily? This is a question that will hopefully be answered in the coming months.
The reality is that the District itself is the party ultimately responsible for the selection of the broker and the oversight of their performance under the contract (especially since they were hired over the objection of AFT). Both AFT and SEIU, have had input, but, ultimately were at the mercy of the District, and forced to rely upon the District’s adherence to its fiduciary obligation to oversee the proper administration of the benefits plan. As these new developments highlight, at some stage of the process, that did not happen.
Going forward, the AFT Health Benefits committee is keenly aware of these realities and will continue to demand complete accurate data before we consider changes to our health plans. Furthermore, while the AFT health benefits committee is a fact-finding and recommendation body only, our findings and recommendations will be regularly reported to the negotiating team. Additionally, we will regularly update you as more information becomes available. For your part, we ask you to stay active, engaged and informed, to that end, we urge you to take the time from your busy schedule to attend the General Membership meeting scheduled for this Friday, October 26, from 11:00 a.m. to 2:00 p.m. at the Courtyard by Marriott Hotel in Oxnard (600 E Esplanade Dr, Oxnard, CA 93036).