HomeMy WebLinkAboutM-84-1119CITY OP MIAMI. FLGNIDr
INTEI't-OFFICE MIEMORANDUM
To: Honorable Mayor and Members DAM October 10, 1984 R�Lt
of the City Commission
SUBJECT: Resolution of Insurance
Dispute with the IAPP# focal 587
,AOM: Howard V• Gary REFERENCES:
City Manager
One
ENCLOSURES:
i
The current collective bargaining agreement between the City of Miami
and the International Association of Firefighters, Local 587, provides
for the implementation of a Union operated medical benefits plan and
rovides for City contributions to that plan for covered employees.
The agreement also requires that the retirees of the Fire Department,
with certain exceptions, be covered by the plan.
Subsequent to the establishment of the Union's plan, a dispute
developed between the City and the Union concerning the basis and
conditions upon which retirees would be required to be covered by the
plan and not covered under the City's self administered plan. That
dispute has been resolved in a fashion which is satisfactory to me and
to the Union and the terms of that settlement are set forth in the
attached Agreement. Essentially, the Union will cover the retirees in
its plan and the City will forward to that plan, the amount it is
presently deducting from retiree pensions for health insurance
benefits. If, in the future, the amount of money deducted from
retirees for insurance benefits were to be decreased, the Union would
not be obligated to provide medical benefits to the retirees unless
the City were to supplement the retirees' cost of those benefits so
that the Union plan is receiving a sufficient contribution from, and
"for, the retirees to provide the benefits.
SUPPLEMENTAL AGRUNI#2
REGARDING HEALTq BENSFIT..ISSUES
i
WHEREAS, issues have arisen concerning implementation
of the Local 587 Plan of Health Benefits under Article 17 of the
current collective bargaining agreement regarding inclusion of
Fire Department retirees in said Plan; and
WHEREAS, the City of Miami and Local 587 desire to
resolve those issues to the extent they are able at this time;
and
WHEREAS, the ultimate resolution of these issues may
have to await the outcome of certain litigation concerning an
action styled Case v. City of Miami No. 83-39724;
f
'kow THEREFORE, the parties agree as follows:
Y. \'The current collective bargaining agreement between
the parties contains a commitment and embodies an intent that any
=
plan of medical benefits operated by Local 587 should cover all
employees and retirees in the same rating group.
` 2. To the extent, if at all, that the mandatory
' inclusion of retirees in the Local 587 Plan is prohibited by law;
or to the extent that a final order in Case v. City of Miami
alters the current cost basis upon which retirees are provided
with medical benefits, all as more specifically outlined in a
1
letter dated September 25, 1984 from Dean R. Mielke to Don Teems;
t then the City shall have certain options concerning the provision
of medical benefits to said retirees as set forth in said letter
which is incorporated herein by reference as a part of this
Agreement.
.
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3. Until such time as the conditions set forth in
paragraph 2 above may occur, if at all, the plan sponsored by
!
Local 587 shall enroll all retired employees from the Fire
s>,
Department, except those 17 persons previously designated on a'
_
4�
list who are not eligible because they are not Union members, and
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'ghall provide medical benefits for those retirees g6 long as the
00sta f6r those benefits are being paid to the Plan* The
effective date of enrollment of the retirees shall be October
1084,
4. To aid in the implementation of the collective
bargaining agreement and this Supplemental Agreement, Local 587
will send all Fire Department retirees the attached letter
advising them that they are being enrolled in the Union's Plan of
Medical Benefits.
S. The implementation of this Supplemental Agreement
Regarding Health Benefit Issues is conditioned upon approval by
the City of Miami Commission.
ATTEST: INTERNATIONAL ASSOCIATION OF
FIREFIGHTERS FL -CIO, LOCAL 587-
ATTEST:
4
ON THE PART OF THE CITY F MIAMI,
MIAMI, FLORIDA
APPROVED AS TO FORM
AND CORRECTNESS
CITY ATTORNEY
6-i
-2-
September 25, 1984
Mr, Donald Teems, President
I.A.P.P., Local 587
2980 N.W. South River Drive
Miami, Florida 33125 ,
RE: Cost to Retirees of health Insurance
I.
Dear Mr. Teems:
This letter will set forth the City's acknowledgment of certain
understandings reached concerning the cost of providing health
benefits to retired members of Vocal 587's bargaining unit.
Immediately prior to July 1, 1984, the date of implementation of
the Union sponsored health benefits plan, the monthly costs being
charged to retirees for coverage in the City administered plan
were as follows:
Life Insurance
- if
under age 61
$10.35
- if
age 61 or older
$9.32
-_ -` Accidental
Death &
- Dismemberment
$1.05
_ Personal Health
Coverage
- if
under age 65
$67.45
- if
age 65 or older
$23.99
— Dependent
Health Coverage
- if
spouse is under age
65
or children are under
age
19
$135.98
- if
spouse is age 65
or
older
$48.12
OFFICE OF LABOR RELATIONS- P.O. BOX 330705. MIAMI. UORIDA 33233-0706 13051 579-6396
DEAN R MIEIKE, LABOR RELATIONS OFFICER °
1 4 )
t ,s. x,Shfis'.
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Mr. Donald Teems
. _ -2- ..
September 25# 1984
A retiree and his or her dependents who become covered under the
Union sponsored health benefits plan will continue to pay the
same cost as was being paid to the City plan. In addition to
those costs set forth above# which are paid to the Union
sponsored plan by the retiree, the City will pay to the plan the
following monthly amounts per covered retiree for the duration of
the current collective bargaining agreement, i.e. until September
30, 1985:
- if under age 65 $9.30
- if age 65 or older $7.68
At such time, if at all# that the cost of any of the above
coverages is increased to participants of the Union sponsored
health benefits plan, the City will increase the amounts paid to
the plan by.the retirees by deducting such additional amounts
from the retirees' monthly pension benefits and remitting the
increased amount to the Union plant provided that the retiree
desires to continue the coverage and provided further that the
retiree consents to the deduction.
There is presently pending in the llth Circuit Court for Dade
County a case styled Robert Case vs. City of Miami, et al, No.
83-39724 (CA-29)# where n t is claimed by the plaintifft a
retiree of the City of Miami, that the costs of providing medical
benefits to him could not be increased beyond the amounts
initially set forth at the time of his retirement. The City has
defended and will continue to vigorously defend that action on
the -basis# in part, that no agreement or contract exists
guaranteeing a retiree that his or her medical plan costs would
not rise: or that if.the cost of providing medical benefits
increased# the City would absorb that increased cost.
Notwithstanding our belief that the Case lawsuit is groundless,
we understand that you are concerned t at a decision in that suit
might result in the Union having to provide medical benefits
coverage to retirees without retirees paying the full cost of
those benefits. You have also asserted that you believe it would
be unfair if retirees would not obtain the fruits of a victory in
the Case litigation due to their coverage under the Union plan
and bung no longer covered under the City's plan.
i
Mr, Donald Teems
3-
2
September 25, 1984
In an effort to alleviate your concerns, and only for that
purpose, if a final order in the Case suit is entered which
directs that the costs to retirrees o� providing medical benefits
cannot be increased even though the costs of those benefits has
increased since the times of their retirements; and further that
the benefits must be provided to the retirees at a lesser cost to
them than they are presently paying, the City, at its sole
option, will either:
1) pay to the Union sponsored plan the difference between the
maximum amount which the Court in Case determines that
retirees must pay to the City for KeaTth insurance coverage
and the premium.uniformly charged by the Union sponsored
plan to all participants, active and retired for -said
benefits, or
2) withdraw those retirees from the Union sponsored plan and
secure'benefits for them from another source consistent with
the ruling in Case.
The City reserves the right to exercise this option at any time
during the current collective bargaining agreement. Neither the
outcome of Case nor the City's exercise of the options above
shall affect t—ie continued coverage of active employees under the
Union sponsored plan or the City's contribution to the plan for
active employees for the duration of the current collective
bargaining agreement.
Finally, the City will not attempt to worsen the position of
retirees who benefit from any final order in the Case suit by
reason of their inc lion in or exclusion from a Union
administered healt enefits plan.
Sincerely, ��� ;,� _ I
A*--,O- 1 0
Dean k. Mielke
Labor Relations Officer
DRM/pl
T_,
MIAMI ASSOCIATION of FIRE I~IOI TEAS
MIAMI, FLORIDA ORGANIZEDOCTOBER,1938 LOCAL NO.88t'
TELEPHONE: 835-1187
DON TEEMS, President
20800 N.W. MIAMI COURT
MIAMI, FLORIDA 33169
AFFILIATED WITH
AMERICAN FEDERATION OF LABOR
CONGRESS OF INDUSTRIAL ORGANIZATIONS
FLORIDA AFL-CIO
PROFESSIONAL FIRE FIGHTERS OF FLORIDA
SOUTH FLORIDA COUNCIL OF FIRE FIGHTERS
RE: Local 587, IAPP
Medical Insurance Plan
Dear Retiree:
WTVINATIONAL AUMIA1 ON
of "At ria"Irou
WASHIPMON, D.C.
WILLIS ALLEN, JR.
Oftretary-Treasurer
90025 N.E.14th CT.
MIAMI, FLORIDA 33170
You have previously received several letters from the City of
Miami and representatives of Local 587 concerning the
establishment of the Union's health benefits plan in accordance
with our current collective bargaining agreement with the City.
Some confusion has developed. As you have been advised, that
agreement provides that all employees and fire department
retirees -are to be eligible for coverage under the Union's plan
(unless the individual did not wish to be a Union member). In
order to prevent the potential inequity and administrative
problems which might result if eligible employees and retirees
could choose between a City administered plan and a Union
administered plan, the agreement requires that eligible
individuals will only have the Union plan available to them and
that they will no longer be eligible for coverage under the
City's plan. The purpose for this provision is solely to put
everyone in the same group, thereby spreading administrative
costs and claims experience over the broadest possible base. It
was also done to prevent a separation of older, more claims-
-generative persons from younger, less claims -generative persons.
In short, our goal was fairness and cost-effectiveness.
Since the negotiation of the insurance provisions in the
contract, we became aware of the existence of a lawsuit filed
against the City by Robert Caser a retired police officer. That
suit claims that the City unlawfully increased the cost of
medical benefits for retirees in 1982 and that a retiree cannot
unilaterally be required to pay more for medical benefits than
(s)he was paying at the date of retirement. We have no opinion
concerning the merit or lack of merit of the claims in that
lawsuit. We haver however, taken the position with the City that
a retiree's cost of obtaining medical benefits should not be
affected by reason of his/her inclusion in the Union plan instead
of in a City administered plan. In discussions with the City, we
have been assured that the City does not seek to have retirees
pay any more to the Union's plan than they would otherwise be
required to pay to a City administered plan. Specifically, the
City has stated in a letter dated September 251 1984, that:
UNITED IN THE PROTECTION OF AMERICAN LIFE, HOME, INDUSTRY
,.:
. I • a
"...the City will not attempt to worsen the position of
retirees who benefit from any final order in the Case
suit by reason of their inclusion in or exclusion-Y—rom
a Union administered health benefits plan."
Having received the above -stated assurance from the City, Local
587 unhesitatingly and enthusiastically is enrolling you in the
Union's health benefits plan. "The benefits and cost to you will
be the same as'they are presently. Administration has simply
been transferred from the City to the Union. If we do not enroll
you in our plan, we jeopardize the continued operation of the
plan and also risk having your benefits terminated. Under the
collective bargaining agreement, the City has the right to
terminate your coverage under the City administered plan.
Thank you for your patience and understanding in this matter.
Welcome to our plan -- and stay healthyl
Fratern lly,
W
Don Teems..'
President
'...the City will not attempt to worsen the position of
retirees who benefit from any final order in the Case
suit by reason of their inclusion in or exclusion=rom
a Union administered health benefits plan."
Having received the above -stated assurance from the City, Local
587 unhesitatingly and enthusiastically is enrolling you in the
Union's health benefits plan. "The benefits and cost to you will
be the same as*they are presently. Administration has simply
been transferred from the City to the Union. If we do not enroll
you in our plan, we jeopardize the continued operation of the
plan and also risk having your benefits terminated. Under the
collective bargaining agreement, the City has the right to
terminate your coverage under the City administered plan.
Thank you for your patience and understanding in this matter.
Welcome to our plan -- and stay healthyl
Fratern lly, '
Don Teems , . '
President