Labor Relations: The Meet and Confer Process

If an agency has existing “me too” provisions in MOUs with employee organizations, or decides to negotiate them in the future, the agency must ensure consistency in labor relations to make certain that the agreements are taken into account when estimating the costs of labor packages. Also, agencies should try to negotiate specific dates to apply to parity agreements to avoid ongoing “me too” requirements. iii. Pro rata Employers should also negotiate provisions that specify that benefits are pro-rated for part time employees. b. Health and Welfare Benefits Group insurance benefits are a mandatory subject of bargaining. The term “benefits” includes the level of benefits, the level of employer contribution, the level of employee contribution, and the method of payment by employees of their contribution. 188 Employers may establish a Section 125 Flexible Benefits Plan. Section 125 is the section of the Internal Revenue Service (IRS) regulations which allow an employer to deduct employee contributions for certain benefits on a pre-tax basis, such as health, dental and vision premiums. Under a flexible benefits plan, employees can use pre-tax salary or wages to create their own customized benefits package. Section 125 plans may also allow employees to pay for dependent care and out-of-pocket medical costs with pre-tax dollars. Employers should specifically designate a portion of Section 125 contributions as “health flex contributions.” Under the Affordable Care Act (ACA) employer mandate, applicable large employers (employers with 50 or more full time employees as defined by the ACA) may face penalties if a full time employee purchases subsidized coverage, and: (a) the employer does not offer “minimum essential coverage” to “substantially all” full time employees and dependents; or (b) coverage is “unaffordable” or “doesn’t provide minimum value.” An employer’s contributions to a Section 125 plan reduce the amount of an employee’s required contribution to health insurance coverage for the purpose of calculating affordability only if the amount constitutes a “health flex contribution.” A health flex contribution must meet the following requirements: (1) the employee may not opt to receive the amount as a taxable benefit, (2) the employee may use the amount to pay for minimum essential coverage, and (3) the employee may use the amount exclusively to pay for medical care. An employer cafeteria plan contribution that is not a health flex contribution does not reduce an employee’s required contribution. For example, an employer flex contribution that is available to pay for health care, but is also available to pay for any non-health care benefits under the cafeteria plan, or be received as cash, is not a health flex contribution and does not reduce the required employee contribution. 189 When bargaining over employer-paid benefits, including contributions to flexible spending plans, employers should endeavor to limit employer contributions to fixed dollar amounts to avoid automatic liability should costs to maintain coverage levels increase. Also, employers should endeavor to limit the “cash-back” available to those employees, including those who waive participation in employer-sponsored benefit plans sometimes referred to as “opt out”

Labor Relations: The Meet and Confer Process ©2019 (s) Liebert Cassidy Whitmore 31