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American Red Cross (NEPA Region) Bargaining Report: June 8, 2010

Contract negotiations recessed late last night without reaching a tentative agreement.

Although both sides met throughout the day, and made minor progress on some economic and non-economic issues, the two major roadblocks to a satisfactory settlement remain - who will pay what portion of health care costs and, compensation for work assignments outside of the normal schedule.

The Union is seeking an increase in the hourly rate for those employees who work in the Apheresis Department, along with relief from working every weekend. Additionally, the Union is seeking an improvement in the hourly rate for those employees hired after June 2007 who work on weekends, as well as other special payment improvements.

In addition to other retrogressive proposals, the NEPA Region is again trying to shift more healthcare costs onto the shoulders of its employees. In the past, employees have been asked to share increasingly higher amounts of the healthcare premiums. The expired contract "caps" the employees' share of that cost at 20%. NEPA Region is now demanding that its unionized employees share an uncapped and unknown amount of those costs in the new contract.

In its attempt to assuage any unease over the prospect of incurring these unknown costs, the NEPA Region points to its unrepresented and management employees. It points out that they have been working without cost caps, and they are not complaining. The Region further states that it continues to pay 90% of Employee Only and 80% in all other categories of the medical benefit costs.

Upon closer inspection the Union discovered that those contribution levels are based on the less expensive "PPO" Plan option. Employees not covered by a Collective Bargaining Agreement (CBA) who choose the EPO option (the vast majority of the unionized employees selected the EPO, with only 7 choosing the PPO) are paying more than 20% of the premium costs for some plan offerings. American Red Cross self-funds its PPO and EPO Plans and their rates are set on a national average.

So, not only do the employees covered by a CBA have good reason to be concerned over "uncapped" healthcare costs, they must also be wary of how those costs are determined.

The Slight of Hand!

For example, since there are no negotiated minimum standards for the current PPO or EPO Plan designs, the Red Cross can, if it chooses to, develop and offer a cheap plan for the sole purpose of setting the Employer/Employee contribution rates (let's call it a PPO). They could design such a plan so that very few, if any, employees would actually participate in it (maybe 7 out of a pool of over one hundred). Those who would participate in such a plan would probably do so only to provide a basic safety net for themselves (probably the healthiest employees). This type of plan, drawing only a few healthy participants, could be expected to generate a lower than normal rise in annual costs. Since this is the Plan that determines the Employer/Employee contribution levels, the cost of all other offerings is contained – for the Employer.


Thus, over time, the spread between the PPO rates and the EPO rates would widen, and, while the costs would stabilize for the employer, employees who select an EPO option would see their rates increase dramatically year over year. The end result would be to force employees to pay inflated premium rates to maintain the better medical plan or to push them into the cheaper but inferior "PPO" Plan.

Past and Current Contributions

At the start of the bargaining session on June 7th, the Union reminded the NEPA Region's bargaining team of the bargaining unit's past cooperative efforts. As many folks pointed out at our meeting on Sunday evening, this group has given up a lot in the past to demonstrate its commitment and dedication to the "lifesaving mission" of the American Red Cross, including:

- Meal voucher payments were eliminated,

- The weekend premium rate was slashed for employees hired after June 2007,

- Vacation and Sick Time were combined as PTO with a reduction in the number of total days permitted off for those hired after August 2004.

- There are only a handful of Nurses remaining on the payroll, having been replaced by less expensive Nurse Technicians,

- Base wage rates for a large number of employees have been frozen for years,

- Increased work assignments on weekends and Holidays,

- Increased workloads for all, especially those in Apheresis, without additional compensation,

- Healthcare Plan options have been reduced,

- Offered Healthcare Plans cost more and include increased out-of-pocket expenses (e.g. co-pays).

CWA further reminded the NEPA team that these concessions came during relatively good times. Now the Red Cross cries "Poor Economy" for its need to extract even more concessions from its employees.


Our next scheduled meeting date with the Region in June 22, 2010.

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