DAS/OUS Healthcare (PEBB & HEM)

The following articles are to keep you up-to-date on the Health Engagement Model and other recent and anticipated changes to healthcare coverage administered by the Public Employees’ Benefits Board.

PERS pick-up buyout proposal FAQ

What is the 6 percent pickup and how did it come to be?

Prior to 1979, state workers paid 6 percent of our wages towards PERS. In 1979, during bargaining, we accepted a proposal from the State to pay the 6 percent into our PERS accounts, which increased member take-home pay even though wage rates remained the same because members no longer had to pay the 6 percent out-of-pocket.

What is our proposal?

Rather than the state continuing to “pick up” the 6 percent by paying it directly into our PERS accounts, these funds would be transferred back to the employee’s pay and then transferred, as a pre-tax deduction, into the employee’s PERS account. Any additional payroll tax, and increased PERS contribution, incurred as a result of the “buy back” would be covered by an additional 1 percent paid by the state into the employee’s pay. The intent is that this would be a zero cost to members.


How would this benefit us?

There are a number of ways this would be in our best interests. First, it would be an additional benefit for OPSRP members (those hired on or after August 29, 2003, also known as Tier 3), as it would translate into a higher average final salary. Currently, Tier 1 and 2 members already have the 6 percent pick-up counted toward their final average salary, but OPSRP members do not.

In addition, pay and benefits that are based on your wage rate would increase; this includes IAP contributions, overtime, out-of-class and lead differentials, vacation payouts, and Social Security calculations. For example, if you work overtime or have a pay differential, this could put more money in your pocket.

Previous attempts to end the 6 percent pick-up would have resulted in an equivalent pay cut for all PERS members; this issue was a central cause of the 1995 strike by state and higher education workers in Oregon. Because we prevailed in striking down the recently passed PERS COLA cap in court, there have already been proposals to end the 6 percent pick up in a way that would not hold us harmless, but would instead entail some sort of pay cut (i.e. legislation allowing for negotiations over splitting the pick-up, or eliminating it altogether at our own expense).

Does this mean a pay increase for me?

No. There would basically be no change in total compensation. It would, however, increase your IAP contributions, overtime pay, out-of-class and lead differentials, vacation payouts, and Social Security.

If this doesn’t put more money in my pocket, why do it?

Besides the fact that the current system suppresses retirement income for OPSRP members, the Bargaining Team is making this proposal as a defensive measure aimed at protecting member retirement for the future.

The Bargaining Team has made proposals to “put more money in pockets” including:

  • A cost-of-living increase on July 1 of each contract year that would be equal to the consumer price index plus 2 percent, with a minimum increase of 2 percent and a maximum increase of 6 percent
  • Steps in each year of the contract
  • Maintaining the current health insurance language
  • Adding two steps to the top of the pay scale
  • Creating a $15 minimum wage for all state employees
  • Working with the State to examine and address the gap in pay that exists between women and men who do jobs with similar skill levels

Would the PERS buy back impact my ability to qualify for public assistance or increase garnishments or other payments I am required to make?

It’s not possible to speak to all circumstances. If you are impacted by an income-based benefit or payment plan, you’ll need to consult with whoever oversees your benefits or payments. Be sure to tell them this is a “pre-tax retirement benefit.”

Is this a new idea?

No. The idea of buying out the 6 percent has been discussed at bargaining tables and in the legislature for years. Many unions, including our fellow members at Portland Public Schools and most firefighter and law enforcement bargaining units, have already adopted a buyout because they saw it as being in their best interests. Our bargaining team believes this is the best way to secure our retirement.

Why now?

This concept is a carry-forward from previous bargaining sessions and the current Bargaining Team recognizes the time is right and winning the proposal is crucial. At the Bargaining Conference held on Sunday, January 25, this proposal was brought forward to the assembled delegates. The delegates in attendance understood the importance and supported moving this forward.

Timing is critical as we face huge attacks on Unions and public workers. These attacks are focused on collection of dues, the right to collectively bargain and the ability to have a secure retirement.

How would it work?

See chart above. If we were to agree to this framework, our bargaining team would need to negotiate the details, including effective date and implementation.

How would this impact my dues and other payroll deductions?

Any deduction based on a percentage of your wages would be impacted. On the income side, overtime, wage-based differentials, vacation payouts would benefit. Similarly, dues would go up a small amount: For every additional $100/month you earn, your dues would go up $1.70. For example, if you make $40,000 a year, your dues would likely go up between $3.40 and $3.90/month, depending on exact terms of the buy-out.

Would I be able to pay that money into a 401k of my choice or use it otherwise?

No. By law, the 6 percent must be paid into your IAP account either by the employee or the employer.

How will this impact my income taxes?

While the funds are part of your income, they are not reported in Gross Income for tax purposes. The deduction is handled on a “pre-tax” basis just as your portion of your insurance premium is handled; therefore, it will have a negligible impact on your income taxes.

For information on PERS, there is a wealth of information on the PERS website, including the following benefit comparison chart:


This FAQ was updated May 6, 2015, and will continue to be updated as more information is available.

PERS video

A short animated clip explaining the past and the future of PERS:

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PEBB announces September face-to-face meetings for 2015 health plans

PEBB has just announced that they will do a series of meetings around the state to inform us about our health care choices for 2015.  Increased communication is something our committee has pushed for and we are glad to see an expanded list of in-person meetings happening prior to October open enrollment.  Click here to find the meeting closest to you – the meetings start this Thursday, Sept. 4th.

As a reminder, there are two big pieces of good news around our health insurance:

  • We will receive our cost of living adjustment (COLA) this month (3 months early!) – the 2% COLA will go into effect on Sept. 1, 2014 thanks to union contract language that puts money unspent on healthcare into our paychecks.  This is a direct result of health care premiums going slightly down in 2015.
  • If full-time members choose the least costly plan in their area, their premium share will be reduced from 5% to 3%.

These steps forward are due to increased member activism around contract negotiations and healthcare, and to effective advocacy by our union PEBB representatives. Despite these gains, we still believe the state has a ways to go in improving our work environments so that we can all be healthier.  We will provide updates as we make further recommendations to PEBB.

In Unity,

Your PEBB Member Advisory Committee (PMAC) Representatives
Keary DeBeck, Labor Chair for the Committee, Dept. of Justice
Cary Fardal, Oregon State Hospital
Wednesday Martin, DHS Vocational Rehabilitation
Shaun Parkman, Oregon Health Authority
Siobhan Martin, SEIU Staff Advisor

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Two big wins for state and university workers put money in members’ pockets!

Exciting news: two more wins coming out of our 2013 contract campaigns with the State and OUS!

As you know, healthcare has been and will likely continue to be a major point of contention in contract negotiations. In 2013, our bargaining teams negotiated two key provisions that would not only hold the line, but begin to regain some of the lost ground around healthcare. Today, we’re happy to report these victories have been realized:

1) Reducing the 5% premium share down to 3% for those members who select the lowest cost plan in their area, even if there’s only one plan to choose from. This necessitated at least 95% of members having more than one plan to choose from, and PEBB’s recent plan selections made this a reality. Not only does this put more money in members’ pockets but it also expands healthcare choices for members in rural Oregon. Click here to see which plan has the lowest costs in your county. (updated 7/30/2014, pdf download)

2) Moving up the effective date of the next cost-of-living raise (COLA) if healthcare costs come in below projections. Based on the rates recently adopted by PEBB, it now looks like the effective date of the COLA will be moved up at least to September 2014 (instead of the originally planned 12/1/14). We expect to know the exact effective date within the next week and will keep you updated.

More information on these provisions can be found in the State worker contract Article 31 and the OUS worker contract Article 21 and Article 24.

These victories were possible because of the great power of members coming together to push for fairness, and from the aggressive and strategic work of our PEBB representatives in advocating for better healthcare quality and pricing. And none of this would have been possible without our strong voice in the Capitol, powered by the Citizen Action for Political Education (CAPE) program. Please click here to contribute to CAPE to strengthen our voice and enable future healthcare victories.

At a time when public sector workers are suffering enormous roll-backs to their healthcare, it’s exciting to see that we can work on positive solutions that bring down costs and share those savings with front-line workers.

In Solidarity,

Heather Conroy, SEIU 503 Executive Director
Keary DeBeck, State Worker Bargaining Co-Chair
Marc Nisenfeld, OUS Worker Bargaining Chair
Dan Smith, State Worker Bargaining Co-Chair

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State workers vote to ratify contract

The tentative agreement for the 2013-2015 union contract has been ratified by state worker members. At the ballot count August 17, with just under 5,000 ballots cast, 95% of voters approved the agreement.

We hope you share the pride we feel in the substantial improvements in this contract, as well as in the unity and action demonstrated by thousands of members.  In pickets, purple-ups, strike preparations, and political participation in our communities, the halls of the Capitol and at the ballot box, we demonstrated to management and our fellow Oregonians that we are indeed all “In It Together.”

The next few years will continue to challenge us. There continues to be discussion of a special legislative session later this year to enact further PERS cuts. On the 2014 ballot, anti-union forces are putting forward measures that, if passed, would weaken our collective voice. As we navigate these challenges and prepare for contract negotiations in 2015, we must maintain the great spirit of solidarity—with each other, our clients, and all Oregonians—that propelled us to victory today.

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State worker bargaining team reaches tentative agreement

For months, state workers have been showing our fellow Oregonians what it means to be “In It Together.”  In hundreds of actions culminating in an overwhelming strike authorization vote, thousands of SEIU 503 state workers sent a loud and clear message that we won’t back down until we have a fair contract.

Our work has paid off. Early this morning, we reached a tentative agreement with the state that we believe is just, returns us to a place of economic stability, and begins to address broader issues Oregonians face.  While we all want and deserve more, we believe that together our campaign brought about the best agreement possible.

Some highlights of the agreement include:

  • Holding the line on 5% premium share, plus a pathway to a 3% premium share in 2015

  • Maintaining the low-wage worker and part-time worker healthcare subsidies

  • Cost-of-living raises of 1.5% effective Dec. 1, 2013 and 2% effective Dec. 1, 2014

  • End step freeze

  • No changes to the 6% pick-up

  • An end to furloughs

  • Healthy workplace improvements, including trauma training, a statewide healthy workplace committee, and enforcement options to address bullying.

More details will be available via email and at www.seiu503.org in the coming days.

Next steps:

  1. Bargaining Conference: On July 27, elected bargaining delegates will come together in Salem to discuss the details of the tentative agreement.

  2. Membership Vote: Following the conference, a ratification ballot together with a detailed explanation of the tentative agreement will be mailed to all state workers in SEIU.  If you are not a member we encourage you to join with your coworkers and have your voice counted by returning the enclosed membership application with your ballot.

In a recent opinion piece in the Statesman Journal, SEIU 503 Executive Director Heather Conroy made the case that the fight for a fair contract is about more than ourselves–it’s about standing up for our clients, our communities, and Oregon’s middle class. We have been honored to help lead that charge as your elected bargaining team, and we look forward to continuing in that struggle with you.

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State worker bargaining update: pushing for the best contract possible

Our team has been back at the table for the last two days.

On Monday, we got some more movement from management.  They’ve moved to 1.5% effective December on the COLAs, better language around contracting out, and they dropped their email ban proposal.

In addition to wages, we’re still a ways apart on the low-wage worker healthcare subsidy, selectives, and the step slide issue.

We’re hoping to reach settlement on a fair contract this week; however, we are preparing to exercise our power next week if need be. Please plan on joining a strike preparation meeting at your local field office this weekend. Offices will be open 9:00-6:00 both days.

We’re back at the bargaining table again tomorrow and will continue to push to get the best contract possible!

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Strike authorization vote passes

The votes are in, the ballots are counted, and SEIU 503 state workers have given our bargaining team the authority to call a strike if necessary. Members voted by participating in dozens of strike authorization vote meetings around the state and by mailing in absentee ballots.

Our bargaining team meets with the State again on Monday, where we expect to have an earnest conversation about healthcare and cost-of-living raises, and we will continue to push the State to get Oregon’s money back from the contractors and Wall Street banks that ripped us off. Watch your inbox for a bargaining update Tuesday morning.

Although the bargaining team hasn’t called for a strike at this time, setting a strategic date is critical. The date of a strike determines how much impact we can have at the bargaining table as well as whether full-time workers can complete their 80 hours for insurance eligibility.

To achieve the most strategic strike date (if necessary), on Friday, July 12, our bargaining team filed a ten-day Notice of Intent to Strike with the Employment Relations Board. This notice is a placeholder to satisfy state labor law requirements, and would allow us to strike as early as July 22. It can be withdrawn if our team reaches settlement, changes the date of the action, or for any other reason.

“We would like to thank the thousands of members who voted on this important matter,” said Dan Smith, a clinical psychologist at Oregon State Hospital and bargaining team co-chair. “We take the responsibility you gave us very seriously, and we are proud to stand with you in holding the line for the middle class.”

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Members weigh in on our healthcare future at PEBB regional meetings

SEIU members from all over the state are showing up to share their ideas at PEBB regional meetings this week. Last week, members in Ashland, Eugene, and Bend turned out to meetings and participated in some good conversations about our healthcare future. Among other topics, we discussed which issues PEBB  should be accountable for versus doctors and healthcare providers.

Members raised issues about healthcare waste and called for lower costs, more choices of healthcare providers—especially in rural areas, more coverage for alternative medicine, and more information about PEBB decisions that affect our health and our health coverage.

Members are saying they care about their own health and want effective options for how to improve it.  They don’t want a repeat of the HEM. In Bend, members expressed support for more of a say in how PEBB chooses which plans are offered to PEBB members. And they want updates on the RFP process (how and which plans are chosen) in real time!

Make your voices heard! Sign up for one of the PEBB meetings this week in Salem, Portland, and Coos Bay.

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Go After Wall St. Banks, Not Seniors and Workers

With 40 members watching in a Capitol hearing room and that many more tossing play money at passers-by in the corridor outside, SEIU Local 503 witnesses told legislators to go after the bad guys on Wall Street before balancing the budget by cutting senior care and breaking contractual commitment to retirees.

Four SEIU witnesses — retiree Linda DeLucia, DHS worker Julianne Frederickson, Homecare worker and SEIU 503 Secretary-Treasurer Rebecca Sandoval and SEIU 503 Executive Director Heather Conroy — all urged members of a Joint Ways & Means legislative subcommittee to demand that Governor Kitzhaber do more to recover the estimated $300 million-plus in funds lost to the Oregon Public Employee Retirees Fund and other state holdings through fraud and chicanery. They also said the state should cease doing business with financial institutions that have bilked Oregonians.

Conroy noted that if the funds were still in state hands, the PERS’s unfunded liability would be a billion dollars less than it is today. Sandoval talked of the care she affords to a 99-year-old client in Medford that has allowed the woman and her disabled granddaughter to remain in their home – care reduced by the state to offset the economic impact of the crash attributed to reckless Wall Street investors.  Frederickson described the debilitating impact of huge caseloads caused by cutbacks and the sense that caring frontline workers are bearing more than their share of the burden both at work and in their paychecks, and DeLucia, ironically a state fraud investigator during her 30-year public employment career, spoke of the breach of trust involved when the state would seemingly rather try to break contracts with its retirees than fight harder to have banks return the funds their fraud and recklessness cost the state.

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HEM update – state wants to silence us

The Health Engagement Model (HEM) program is now in its second year and we succeeded in making the program less punitive: Members who have chosen not to participate should no longer be seeing a monthly surcharge and those who are participating should be receiving an incentive. In bargaining with the State, we have learned that management is proposing to eliminate our committee in the next contract so that we will no longer have the ability to make formal recommendations about the HEM. We think this is the wrong move and the state should learn from their mistakes, not repeat them.

One of the charges of our HEM committee is to evaluate the program and make recommendations to the Governor’s office based on this evaluation. Last spring, we made the recommendation to the PEBB board that they hire an outside consultant to begin this process – which started in the fall. The consultant did a mail survey and heard back from 2,347 PEBB members – 1,989 of whom were enrolled in the HEM and 358 who were not. What the survey showed:

• Overall there was low program satisfaction with the HEM – among participants and non-participants alike. Top reasons for this dissatisfaction were around privacy concerns and coercion to participate.
• A majority of respondents took the e-lessons. Respondents who reported taking the lessons on weight and diet said they changed their lifestyle and had some success in maintaining those changes.
• It is too early to see if the HEM is impacting people’s health. Surveying a population once provides no trends on whether health is improving over time.

The PEBB board did make the decision in their February meeting to continue the program in 2014 as it’s currently designed – with the same incentive for participants and same increased deductible for non-participants. While we think program satisfaction would improve further if the increased deductible for non-participants was eliminated, we were glad to see that PEBB representatives voted to continue the incentive pay and not increase the deductible for non-participants.

Make your voice heard in April: PEBB will be hosting a series of meetings around the state from April 1 – April 11 to discuss our healthcare, including how to make it better and how to lower costs. We strongly encourage people to attend. More information about these meetings here: www.seiu503.org/GetItRight. We think it’s incredibly important that PEBB hear from us prior to making changes to our healthcare plans. We understand that PEBB is going to be looking at new providers for the 2015 plan year so we need to start making our voices heard now.

As we stated at the beginning of this email, we are incredibly disappointed that the state does not want to continue the work of the HEM committee and believe it sends the absolute wrong message around all of us working together to have healthier workplaces and a healthier workforce, which would ultimately bring costs down. This is one of many bargaining proposals we need to push back on. Quality health care is a crucial benefit, as are our wages and retirement. We encourage everyone to let the Governor, their managers, and the legislature know: we deserve a fair contract that respects our rights and our voices, and doesn’t pay for services at our expense and the expense of retirees.

In unity,

Keary DeBeck, DOJ, Salem
Sabrina Freewynn, OHA, Portland
Wednesday Martin, DHS, Roseburg
Shaun Parkman, Alternate, OHA, Portland
Siobhan Martin, Staff Advisor

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