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  • WisBar News
    April 16, 2013

    City of Milwaukee Can Modify Health Insurance Provisions in Labor Agreement 

    April 16, 2013 – A state appeals court has ruled that the City of Milwaukee can modify its labor agreement with the Milwaukee Police Association, because Wisconsin’s collective bargaining laws prohibit bargaining on health care coverage costs.

    Before entering into a labor agreement, the sides disagreed on whether Wisconsin’s new collective bargaining laws barred the police union from bargaining on the related costs associated with health care coverage of municipal safety employees.

    The Municipal Employment Relations Act (MERA), Wis. Stat. section 111.70(4)(mc)6, prohibits bargaining on the “design and selection of health care coverage plans by the municipal employer for public safety employees,” as well plan impacts on wages.

    The parties reached a labor agreement, but a provision within the agreement noted that certain items covering health insurance costs would be resolved through litigation. In addition, the parties agreed to reenter negotiations if a court declared that part void.

    The circuit court ruled that the city could not modify the labor agreement’s provisions on health care deductibles, copay amounts, or prescription costs, concluding that MERA did not preclude bargaining on those subjects. Recently, the appeals court reversed.

    In Milwaukee Police Association v. City of Milwaukee, 2012AP1928 (April 16, 2013), a three-judge panel for the Wisconsin Court of Appeals rejected the union’s contention that MERA does not prohibit bargaining on the “direct” impacts of a chosen plan.

    The union conceded that under the statute’s “design and selection” clause, unions are excluded from the municipal employer’s process of choosing a health care plan.

    But that does not prohibit bargaining on the financial exposure that results from the municipality’s “design and selection” decision, the union argued. That is, if the choice directly affects member finances, it is a proper subject of bargaining, the union said.

    The appeals court disagreed, noting that MERA took away the union’s ability to bargain on the employer’s health insurance plan contributions. Before MERA, the financial impact of managerial decisions was a proper subject of bargaining, the panel noted.

    “It would make no sense for the legislature to have granted to the City and other municipal employers the unilateral right to design and select health-care-coverage plans irrespective of the ‘impact’ …,” wrote Judge Ralph Adam Fine for the panel.

    Thus, it vacated the writ of mandamus issued by the circuit court, which prevented the city from modifying the health care coverage terms in the labor agreement. 


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