Monday, January 14, 2013

Kaiser: SEIU-UHW's Cuts to Workers' Retirement Benefits Are Worth Billions

Here's a doozy. Kaiser's accountants have finally revealed the price tag for a massive cut to workers' benefits that was negotiated by SEIU-UHW and the Coalition of Kaiser Permanente Unions during last year's “national bargaining."

How much is the benefit cut worth? $1.9 billion, according to a  financial statement issued by Kaiser.

Here's what happened.

In California, Kaiser has always paid the monthly premiums for SEIU-UHW members’ retiree medical benefits. Last May, however, SEIU-UHW’s Dave Regan inked a deal that lets Kaiser “cap” the amount it’ll pay towards each worker’s monthly premiums. This leaves workers on the hook for the remaining amount, effectively sucking dollars out of workers’ pockets and depositing them into Kaiser’s bank account because workers are required to buy coverage from Kaiser.

So… is Kaiser hurting for cash? Not a chance! Since 2009, the HMO has banked more than $8.7 billion in profits.

Then how did Regan get Kaiser’s workers to accept this massive benefit cut? Regan predictably hid the details from workers and dishonestly promoted the deal as a “win-win” for workers and Kaiser.  

Here’s what SEIU-UHW revealed to workers about this deal prior to ratification votes in May of 2012:

Establishes a dollar amount that Kaiser will pay toward retiree health benefits in 2017. The dollar amount is more than enough to cover retiree health benefits, but funding it this way will allow Kaiser to borrow money at lower rates so they can build new hospitals faster and at lower cost.

And here's the excerpt from the original document:

So, is SEIU-UHW's description of the deal accurate? 

No, say Kaiser’s accountants. Months after Regan’s deal was approved, Kaiser’s accountants finally revealed the true price tag of SEIU’s concession. Kaiser’s financial report describes the deal this way. 

During 2012, various Health Plan and Hospital postretirement and health care and life insurance benefit plans were modified for certain union-represented employees. Under the terms of these agreements, Health Plans’ and Hospitals’ retiree medical cost in future periods for affected participants will be based on a fixed maximum amount of employer funding toward the costs for retiree medical coverage. These agreements have been accounted for as negative plan amendments and resulted in a reduction in liability for postretirement benefits other than pension of $1.9 billion.
Translation:  SEIU-UHW and the Coalition of Kaiser Permanente Unions shifted $1.9 billion in retiree health costs off of Kaiser's plate... and onto the backs of workers. Stunning, right?

Unfortunately, this isn’t the first time that SEIU-UHW’s members have experienced Regan's purple treachery. In 2010, Regan and Hal Ruddick told 15,000 workers at Dignity Health that a massive change to their pension plan was in fact “an improvement.” Months later, Dignity revealed to investors that SEIU-UHW’s so-called "improvement" had actually stripped $217 million in pension benefits out of workers’ pockets by shifting workers into a cheap 401(k)-like retirement plan.