Providence

Comments | Recommended

Arbitrator backs Providence municipal unions on health-care administrator

01:00 AM EDT on Wednesday, August 19, 2009

By Gregory Smith

Journal Staff Writer

PROVIDENCE — An arbitrator has blocked for the foreseeable future Mayor David N. Cicilline’s disputed attempt to switch the health-care benefits administrator for city employees who are represented by labor unions.

Arbitrator Girard R. Visconti declared in effect that by making the switch, Cicilline would have violated labor contracts by diluting employee health-care benefits. Cicilline had insisted repeatedly that there would have been no significant change in benefits.

The decision by the court-appointed arbitrator, which was distributed to the mayor and the unions Monday, is a sharp setback in Cicilline’s campaign to better reconcile employee costs with the city’s ability to pay. Cicilline had claimed that switching from Blue Cross & Blue Shield of Rhode Island to UnitedHealthcare of New England would save the city nearly $6 million over three years.

“We’re very happy” with the decision, said Clarence W. Gough, vice president of Lodge No. 3, Fraternal Order of Police. “If they want to change [administrators], then it’s something that they’re going to have to negotiate” rather than impose.

Members of the FOP as well as members of unions representing teachers, other school personnel, nonschool employees and certain retirees are protected by the ruling.

Cicilline spokesmen Tuesday afternoon did not return telephone calls seeking comment.

Visconti’s ruling is part two of a two-part decision; in part one, he said in effect that the mayor could not tamper with the health-care benefits administrator for members of Local 799, International Association of Fire Fighters, and certain retirees.

The city is self-insured for health-care costs but hires a company to administer the coverage. In that hiring decision, the Cicilline administration accepts networks of physicians and hospitals and other provisions that vary between companies. The key concept is whether those networks and other provisions incorporate benefits that are “equivalent” or “equal,” in the words of the labor contracts, to what the employees and retirees have currently.

Visconti said in his latest ruling that there are “obvious and substantial differences” in the benefits package that would be administered by UnitedHealthcare compared with the package offered by Blue Cross. For example, some employees would have to pay more if they used a physician who was in the Blue Cross network but not in the UnitedHealthcare network.

He ordered that the city maintain the benefits that it provided as of Dec. 31, 2008, but said that the city may switch administrators if equivalent benefits can be preserved.

While the decision may stymie the switch only for the foreseeable future, it raises the question of whether Cicilline could modify the contested benefits in compliance with the arbitrator’s edict and still realize his claimed savings.

Gough said it would be impossible to accomplish that because UnitedHealthcare’s price quote is inextricably tied to the benefits. Paul A. Doughty, president of the firefighters union, reiterated his contention that the savings always were illusory and were merely a public relations stunt by the mayor.

The decision “stands for two ideas, that some parts of the contract are sacred … [and] that you get more flies with honey than you do with vinegar,” Doughty said. “The city should rethink its [bargaining] process.”

The city provides health-care benefits for about 9,800 people, according to the latest available figure, of which about 5,500 are active employees and about 4,300 are retired.

Cicilline announced last year that he would switch administrators effective Jan. 1 and he contended that the language in the labor contracts left him free to do so. The move provoked howls of protest from the unions, which staged a rambunctious rally against him at one of his political fundraisers and then sued in court to block him.

The fight moved up to the Rhode Island Supreme Court, where then-Chief Justice Frank J. Williams ruled that the mayor could change the city’s administrator of prescription drug benefits from Blue Cross to CVS/Caremark for an estimated savings of about $5 million over three years. The unions said that was only a mildly contested issue.

But the chief justice ordered that the dispute over the bulk of the health-care benefits be settled by special arbitration. Williams appointed Visconti, one of Cicilline’s nominees as arbitrator, to hear the case.

gsmith@projo.com

Advertisement

Reader Reaction