| HVHC Inc. - A Highmark Company 2009 Benefits Package The Good, The Bad & The Ugly by Dave Armer Empire Vision and Davis Vision employees have been hearing about medical benefit changes for 2009. As usual there is a combination of rumor, misinformation and elements of truth to the grapevine of information that has spread across the companies. In this article I will share all the facts I have gathered over the last weeks as HVHC (Highmark Vision Holding Companies) has rolled out its changes over the 8800 workers that it employs. The plan truth is that on some aspects even the managers and the HR folks charged with implementation are not getting the whole story. I have been fortunate enough to have been in the informational “eye of the hurricane' as these changes have washed over Davis Vision and Empire Vision. I am going to get all of you in the loop. This article will also share some of the structural changes that has come with the “new” HVHC. In the end they are all related. It took time for me to get the whole picture. Now I think I can paint an accurate picture of where we are headed and why. This benefit package has some radical departures from the way benefits have handles in the past. The title of this article speaks to the fact that, as I see it, there are goods and bads to be dealt with. The problem that bothers me is that HVHC is not going to tell you the bad parts, but, thats why you hired me to do this job. Let's start with the big gun. Your medical benefits policy. What is the new Highmark Blue Cross Blue Shield PPO? HVHC wants all of its 8800 employees (ECCA, Empire, Davis & Viva) on the same medical program. It's perfectly natural for any company that wants to grow and prosper to seek cost efficiencies by streamlining administration costs and developing synergies between units. Placing all the HVHC companies in a single pool makes sense from a strict dollars and cents perspective. The new Highmark BCBS is a “self-insured” high deductible health plan with savings option. Whoa! What does all that mean? Lets break it down into parts. Self-insured: A self-insured plan means that our employer no longer writes premium check to an insurance company every month in exchange for insurance benefits. Self-insured means that our employer pays for all the medical costs that its employees incur from its own funds. Companies that choose this option have discovered that is cheaper to simply pay the employees claims that to purchase insurance. At Empire Vision if an employee selects the family plan they will pay about $3600 as their part of the premiums. A traditional family plans cost close to $13000 for the company to purchase. With self-insurance the company can put the $9400 it saves toward paying medical claims. The company will purchase a separate “catastrophic' policy to protect itself from large claims. High deductible health plan: This is a fancy name for shifting the cost of health care away from the company and onto the backs of employees who make the unfortunate choice of getting sick or injured. High deductible plans require the insured to pay out of pocket for the first claims that fall outside the “preventive care” criteria. Fall down on an icy sidewalk and the first $300 come out of your pocket IF you have paid extra for the “Premier” plan. If you selected the “Standard” plan the first $600 will come out of your pocket. Double these numbers if you slipped and fell down with your spouse. High deductible plans also come with “co-insurance”. With the Premier plan you will pay a co-insurance of 10% up to $2000 for a single or $4000 for the other plans. This co-insurance is based on a “reasonable and customary” rate. A MRI may retail for $1800 but the R & C rate may be $900. You would pay $90. Where this gets dicey is if something really bad happens to you in December. You could rake up you $2300 in deductibles and co-insurance and then turn around and get hit again in January. This scenario requires a catastrophic injury or disease but that's what we get insurance for. I personally know a union member that is about to donate a kidney to a family member. Do this in December and she can expect $9200 in bills between the two of them. If you elect the “standard” plan you can double these numbers. This example is extreme and statistically rare. But there are many steps between this extreme and no cost at all. High deductible plans are designed to make the sick and unfortunate pay more so that the company can make more. Savings option: The savings option is your Flexible Spending Account (FSA). An FSA gives you the ability to save on a pretax basis money towards medical expenses. You need to estimate the amount you will spend and designate that during enrollment. Saving $1000 only costs you about $750 after you file your taxes. The Company is legally obligated to pre-fund that $1000 amount in a escrow account but you pay it in equal installments over the year. If you use the entire $1000 in the first few weeks of the year and then quit, the company is still on the hook for the money. However, if you don't use the full amount saved the company can use that money to pre-fund the next year. (Lose it or use it) There are benefits and risks for everyone. If a company forces you into a high deductible health plan then you are forced to think about funding an FSA. SO: There you have it. HVHC wants everyone in a self-insured” high deductible health plan with savings option The good news is that it can reduce or hold down premium increases for employees over time (theoretically). Your preventive care is covered in full to help you not get sick. The key to this plan is to make sure you make good health decisions like: Don't fall down and get hurt. Don't get into accidents and get hurt. Don't contract any disease that might not kill you quickly. Don't get sick near Christmas. Don't have family members that might do any of the above. The new plan also breaks coverage into four tiers; Associate only, Associate & Partner, Associate & Child and Family. The Associate & Partner and the Associate & Child should see dramatically lower premiums compared to when they had to join the Family tier to cover another person. The Family tier may experience an increase in premiums because the others no longer subsidize your tier. The two tier VS four tier boils down to two differing philosophies: “One for all and all for one” OR “Every man for himself” In my humble opinion I believe the HVHC leadership has taken the position: Every man for himself. If you get really, really sick it's your tough luck. Not our problem. The Vision Benefit The HVHC leadership has taken the position that our vision benefit was too generous and needs to be cut. We have actually been in the position of constantly having to remind them that they signed a binding contract that entitled us to this benefit. The hope is that the error in the book pages is clerical and we won't have to pursue yet another arbitration. In the Empire talks that actually took the position that ALL lenses didn't mean all lenses. Short-term Disability (STD) This is a good thing folks. (For those of you that will get it) But as good as it is they still could not bring themselves to be totally honest about it. The short term will kick with proper documentation of illness or maternity. You can collect it concurrent with any state disability you are eligible for but they fail to mention that state payments will be greatly reduced as a result. It is still a good thing to have. Thank you. (Empire Vision folks will not get it. More on that elsewhere.) Long-term disability (LTD) I hope none of you ever need this. On the surface it is a useful addition to the benefit package but here are a couple realities. Short of spending 6 months in a body cast there is little chance of collecting on this. The policy is through a third party insurer and that independent insurance company has total discretion over whether or not you qualify. There are many things that can disable a worker that insurance companies will resist paying for. In negotiations I considered this as a near valueless benefit. Life Insurance This benefit is good if your current contract doesn't already give you something better. The Empire contract obligates the company to provide 2X earning. This benefit will let you pay extra for 2 or 3 times benefit IF the insurance company accepts your Evidence of Insurability. Translation, don't bother if you have any health issues or be prepared to pay more. Davis Vision talks VS Empire Vision talks A series of negotiations have taken place over the past few weeks to address these new benefits for each bargaining unit. First up was the Davis Latham contract. Then we addressed the Davis Labs and finally the Empire Vision units. I will go into more detail on each. The bottom line is this. Davis Vision did a great deal to satisfy my concerns about the changes and offered significant dollars to help my concerns with comparability. In exchange I am assisting them in rolling out a system of benefits that will help Davis Vision remain competitive without abandoning a strong safety net for union members. The Empire Vision talks ended without any agreement for two reasons.Empire's lack of willingness to address my comparability concerns and a constant undertone , consistent with all our dealings, that our union is no more than an inconvenience to be run over or around without serious consideration. Some History and Recent Changes Our Union, Local 408, draws the bulk of its membership from Highmark Companies. Empire Vision boasts 700 union members from its 90 retail stores, an administrative unit on Erie Boulevard and it Central Lab and Distribution Center in Syracuse on Fly Road. Davis Vision union members number about 350 from it's Info Tech center in Latham, NY and its labs in Plainview, NY and Philly, Las Vegas and Albuquerque. We draw the balance of our membership from, fewer than 100 more, from Council Optician and value vision in Buffalo, NY and Balester Optical in Wilkes-Barre PA. In the not too recent past Davis Vision owned Empire Vision and shared many synergies. As HVHC became an active director of operations this began to change. The other HVHC companies are the 400 plus Eye Care Centers of America (ECCA) across the country and Viva, a eyeglass frame manufacturing and distribution company. The point is that today the Davis Vision's managed care operations operate independently of the Empire Vision retail operations. Davis Vision has it's own CEO, Mr. Steve Holden and annual revenues of nearly half a billion dollars. Empire Vision, it would appear, has become a minor subset of ECCA and is now subject to ECCA's national agendas and philosophies. As Davis and Empire became independent of each other the differences in management philosophy became starkly differentiated. The Davis Vision Human Resource department has undergone a complete overhaul. Robin McConnell is the new Davis HR Director . She brings a broad range of experience and competence to her position. Reference this quote from the Society for Human Resource Management(SHRM): “Robin McConnell has been an integral part of SHRM-LI for over fifteen years and is a former 2-time past president. Within her many roles in Human Resources, Robin keeps abreast of current trends in the marketplace and employment field. Her commitment to SHRM-LI also extends to the state level as she is the current NYS State Director. Two years ago, Robin was honored at the SHRM-LI Annual Conference when she received the Joseph Duffy Award.” Robin has shown a strong commitment to fair play, consistency and holding union members and managers alike to a high standard. I am sure we will butt heads and disagree from time to time but her professional stature and ethics has been a welcome breath of fresh air. I wish her well in all her pursuits. She is partnering with Stephen DiBaise, the new head of HR at Davis Latham. Steve has dug into the monumental task of rearranging a potpourri of issues. He inherits a HR department that could not even calculate earned time off accurately for union members on a consistent basis. Like Robin, Steve has brought a tough but fair brand of leadership to Latham. Davis is in good hands and the union is pleased to do business with folks of this extraordinary and high caliber. I can only hope that this professional demeanor is contagious. The Davis Vision Latham Contract Negotiations These contract talks were the opening round in the medical benefits debate. The contract expired on 9/30/08 and it went right down to the wire. We had nine full days of negotiations. From day one it was clear that HVHC wanted this bargaining unit to take it on the chin. Latham IT is the nerve center of Davis Vision. These folks process claims, interact with all the Davis customers across America and make sure that Doctors and opticians have the data they need to take care of the patient. They have ALWAYS had a very special benefit since day one, over twenty years ago. That benefit was a high quality medical plan at no cost to the employee. HVHC started by demanding that all these employees sign on to a plan that was far worse than what they were used to and that they start paying big bucks every pay period for the privilege. And by the way we will give you a 2% raise. I am surprised they didn't throw in the Brooklyn Bridge as a sweetener. After 8 days of negotiations over a 3 week period HVHC stuck to it's guns and made a final offer that would have left nearly every single Latham employee worse off. The Bargaining Unit voted down that contract offer 143 to 3. The message that these folks gave me was clear. They were ready to walk over this issue. They didn't want to but they were ready to. We had a 30 second “Stand Up” demonstration to try and show management how dedicated this group was. To their credit Davis management held a series of meetings to hear what the workers had to say. Negotiations took only one more day. HVHC put reasonable raises on the table and a program that would phase in the cost sharing aspects of the new medical over the life of the contract. Single associates could maintain a no cost, albeit much worse, medical benefit. That package passed muster with the bargaining unit 134 to 14. |
| EMPIRE VISION RETAIL & LAB WILL NOT BE PARTICIPATING IN THESE BENEFITS EMPIRE HAS AGREED TO FOLLOW OUR CONTRACTS - THANK YOU!!! |