By David E. Worley
In City of Crystal (131 LA 268 (Neigh, 2012)), the arbitrator determined that the City and the Union were bound by the contract language and its plain interpretation in regard to the required contribution of the City to employee’s health insurance as well as contributions to the employee’s Health Savings Accounts. The dispute arose in an unusual context in which premiums decreased after the expiration of the CBA and the City had to determine how to administer the benefit, which was reduced in its cost.
The disputed clauses in the CBA stated, “the Employer will contribute up to a maximum of $[X] per month…” Regardless of the CBA language, the City had paid 100% of the premiums for employees for a “base plan.” Employees electing for the high deductible plan would get the difference in premiums deposited into an HSA. Lower insurance premiums were secured by the City at the same time as the 2012 payroll needed to be established. However, contract negotiations were still ongoing.
The City was concerned with establishing contribution amount for the payroll as IRS regulations would not allow the City to recoup any payments into HSA’s that exceeded a future CBA amount that would be necessarily lower than previous amounts. CBA negotiations stalled, and the City unilaterally enacted their own plan until the CBA was finalized. They would continue to contribute the same amounts, provided they were not paying in excess of the employee premiums. High deductible employees would also have all their premiums paid, but would receive no HSA contribution. The Union grieved this action.
There were two issues. First, could the City unilaterally decide to change the amount it paid toward premiums? Second, could the City unilaterally decide to cease contributions into HSA’s pending the outcome of collective bargaining?
As to the first issue, the City argued, and the arbitrator agreed, that although they City changed the amount it contributed, it was still following the terms of the old CBA.
Although the Union argues that its members believe the intent was to state a guaranteed amount, it can more logically be reasoned that the intent was to protect the City in the situation that has arisen. This language effectively anticipated the unlikely occurrence of a decrease in medical insurance premiums. In any event, the language is clear and it is not necessary to determine intent. The language does not guarantee that the specified amount be paid if it exceeds the amount of the premium.
Similarly, the plain language of the CBA did not contain any language requiring contributions to the HSA’s of the employees who had high-deductible plans;
Furthermore, the CBA is silent regarding HSAs and the City’s contribution to them. Thus the temporary suspension of contributions to the HSAs of employees opting for the high-deductible plan does not violate the CBA. Whether it violates some other legal entitlement is not an issue for this arbitration.
