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Rice Hospital, unions resolve health insurance issue

Erica Dischino / Tribune File photo of Rice Memorial Hospital shot Nov. 8, 2017.

WILLMAR — Steep health insurance premium increases for union employees at Rice Memorial Hospital have been averted with contract modifications that make their health benefits uniform to those of the hospital's non-union employees.

The move will bring financial relief to the approximately 50 percent of Rice's 1,000 employees covered by collective bargaining agreements.

Doug Allen, chairman of the hospital board of directors, said it's a positive way to go into the new year.

"It's a significant change to what's going to be coming out of their pocketbook," he said.

The hospital's union workforce was hit with sticker shock last month when new prices were rolled out at the start of open enrollment. Many faced increases that almost doubled or even tripled their cost of their monthly health insurance premium.

Meanwhile, non-union employees saw their premiums increase only slightly or actually go down. The difference is the result of specific language written into Rice's collective bargaining agreements that spells out how employer and employee share the cost of health benefits.

The bad news came just weeks before a merger between the city-owned hospital, Affiliated Community Health Centers and CentraCare Health System goes into effect. Although hospital officials said the increases were spurred by health plan utilization and not because of the new affiliation, it created last-minute turmoil as the Willmar City Council prepared to sign off on the documents approving Rice Hospital's entry into the new entity known as Carris Health.

Quietly this past month, the issue was settled with a limited reopening of collective bargaining agreements to deal with health insurance.

The window was short: Dec. 14 to Dec. 21. The four unions, each of which had to formally request a limiting reopening of their contract, had just one week to negotiate and bring the change back to their members for a vote.

The contracts represent registered nurses, licensed practical nurses, service workers and paramedics.

Official resolution was reached last week with the hospital board's approval of a memorandum of agreement for each contract.

The agreements also include slight modifications to paid time off and extended sick leave benefits.

Union members must go through the open enrollment process again to formalize their benefit package before the end of the year.

The goal was to settle the issue before Jan. 1, said Mike Schramm, Rice chief executive.

Losing employees was a concern, he said.

Reopening the contracts was "the right thing to do," he said. "I feel good about where we're at today."

Rice will pay more than it anticipated next year for health benefits, but with the hospital set to become part of Carris Health, the benefit package eventually would have become uniform across the organization anyway, he said. "We ideally wanted to get all our employees on the same benefit set. If it wasn't now, it would be a year from now."

With all the union contracts expiring at the end of 2018, the parties will be back at the bargaining table late next year, Schramm said.

Anne Polta

Anne Polta covers health care, business/economic development and general assignment. Her HealthBeat blog can be found at Follow her on Twitter at @AnnePolta.

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