BEFORE THE ARBITRATOR
In the Matter of the Arbitration of a Dispute Between
LOCAL UNION 953, INTERNATIONAL
OF ELECTRICAL WORKERS
CITY OF BLACK RIVER FALLS (MUNICIPAL
(Insurance Benefit Grievance)
Mr. James S. Dahlberg, International Representative, Sixth
District, IBEW, on behalf of the Union.
Weld, Riley, Prenn & Ricci, S.C., by Mr. James M. Ward, on
behalf of the City.
The above-captioned parties, herein "Union" and "City", are signatories to a
bargaining agreement providing for final and binding arbitration. Pursuant thereto, hearing
in Black River Falls, Wisconsin, on December 18, 2001. The hearing was not transcribed
parties filed briefs that were received by February 5, 2002.
Based upon the entire record and arguments of the parties, I issue the following
Whether the City violated Article XVI, Section 1, of the contract
when its health insurance
carrier in February, 2001, increased the out-of-pocket expenses that employees must pay for
prescription drugs and, if so, what is the appropriate remedy?
The City in 1997 changed its health insurance carrier to the basic Wisconsin Public
Group Health Insurance Plan ("State Plan"), which provides for uniform benefits and
for all of its participants. The City pays for all of its health premiums. In 1997, employees
had to pay
a maximum of $80 per year for a single and $160 per year for a family under the State
prescription drug benefit. Employees at that time also had to pay $4 for generic drugs and
In January, 1998, the State Plan increased the out-of-pocket drug maximums from
$130 per individual and from $160 to $260 per family. The co-pays remained the same.
increased costs were passed along to bargaining unit members. No grievance was filed over
In February, 2001, the State Plan raised the maximum out-of-pocket drug expenses
to $240 per individual and from $260 to $480 per family. The co-pays for drugs were raised
$4 to $5 for generic drugs and from $8 to $10 for prescription drugs. Those increased costs
passed along to bargaining unit members. The Union grieved those changes, hence leading
Throughout this time, part of the contractual language relating to medical benefits has
remained substantially the same by providing in Article XVI, Section 1: "The present
hospitalization benefit will not be reduced." The parties never discussed any changes to that
in the last round of contract negotiations.
However, the parties have negotiated over other parts of the insurance provision.
1995-1996 contract stated in pertinent part: "The present medical and hospitalization benefits
be reduced, nor will the present deductible level of $100.00 per person with a maximum of
per family, per year, be increased. . ." (Joint Exhibit 5). This quoted language was
deleted in successor contracts. (Joint Exhibits 1 and 4).
Union Assistant Business Manager Arlin Ziemann testified about the 2001 changes
that the Teamster's contract covering other City workers (Joint Exhibit 15) does not have the
identical language found here relating to a reduction of benefits.
Gavin J. Johnson, who serves as Union steward and who formerly served on the
bargaining team, said that out-of-pocket drug expenses went up "almost every year"; that
never went up before 2001; and that his wife is already "maxed out". On cross-examination,
added that this is the first time co-pays have gone up and that he every year receives from
a booklet describing the State Plan (Joint Exhibit 10).
POSITIONS OF THE PARTIES
The Union asserts that the City violated Article XVI, Section 1, of the contract after
for prescription drug co-pays were raised from $130 to $240 per individual and from $260 to
per family effective February 1, 2002. It argues that Article XVI, Section 1, prohibits
the City from
reducing drug benefits in that fashion; that the previous change in drug co-pays "does not
language"; and that it is immaterial whether other City employees have agreed to the 2001
since they are represented by a different union under different contract language. As a
Union requests that the City be ordered to "return to the benefit level in effect on 1/01/01
make the participants whole . . ." for any added drug expenses they have incurred as a result
The City contends that it did not violate the contract because "carrier-dictated
drug cost increases. . ." cannot be equated with a reduction in health insurance benefits;
City never agreed to maintain drug deductibles after 1997; and because the Union "slept on
by neither filing a grievance in 1998 nor bringing up that matter when the parties. . ."
successor to the 1997-1998 contract.
This case turns on the application of Article XVI, entitled "Insurance", which
Sec. 1. Health Insurance. The employer and employee are
obligated to pay the share of the
insurance premium as established by the Wisconsin Public Employers Group Health
Medical insurance shall be provided to all employees when they are eligible to participate as
determined by the insurance carrier. No employee shall make any claim against the Utility
additional compensation in lieu of or in addition to his insurance premiums paid because he
qualify for the family plan. The present medical and hospitalization benefit will not be
Utility may, from time to time, change the insurance carrier if it elects to do so.
. . .
While there is no direct reference to drug benefits in this
proviso, it is generally accepted that
drugs are included when parties refer to health insurance benefits in their collective
However, the record establishes that the City in 1998 unilaterally increased the drug
without any grievance being filed, thereby leading the City to reasonably believe that drug
could be unilaterally raised under Article XVI, Section 1.
More importantly, the present contract does not contain the prior prohibition on
deductibles that was found in the prior 1995-1997 contract and which stated: "The present
and hospitalization benefits will not be reduced, nor will the present deductible level of
person with a maximum of $200.00 per family, per year be increased. . ." (Emphasis
underlined language shows that the parties viewed "benefits" and "deductibles" as two
matters which is why they are separately referenced, and that the level of "deductibles" is
and distinct from the level of other health insurance benefits. After all, as the City correctly
out in its brief at pp. 7-8, "If deductibles were merely seen as one of the benefits that could
reduced during the contract term, there would have been no reason to insert protective
ensuring that deductibles would not increase."
By deleting the prior language relating to the level of deductibles, the parties thus
deductibles could be increased. That is why the City did not violate the contract when the
drug co-pays were increased by the State Plan in February, 2001.
Hence, if the Union wants to prevent that from happening again, it will have to
language in negotiations which limits such increases.
In light of the above, it is my
1. That the City did not violate Article XVI, Section 1, of
the contract when its health
insurance carrier in February, 2001, increased the out-of-pocket expenses that employees
for prescription drugs.
2. That the grievance is therefore dismissed.
Dated at Madison, Wisconsin this 14th day of February, 2002.