AEA vs. PEEHIP- The TRUTH!


Mark Twain is credited with popularizing the idea that there are three kinds of lies: “lies, damn lies, and statistics.” Lately, however, he could have substituted “headlines in the November Advisor” for statistics and been entirely correct.

AEA members should be furious at the misinformation that continues to be published by the PEEHIP staff in their Advisor publication. This month’s headline, “AEA Lawsuit Could Ruin the Education Budget,” is just the latest in the continuing effort by certain individuals within PEEHIP to divide educators and confuse the issues in the litigation.

Because AEA has always had a solid working relationship with PEEHIP – given that it was AEA’s Dr. Paul Hubbert who crafted the legislation to create PEEHIP – we have tried to be measured in our response to certain things that have been said by PEEHIP staff in the months that the litigation has been on-going.

AEA has taken the position that the PEEHIP lawsuit was an unfortunate means to rapidly facilitate a positive resolution to an internal “family squabble.” As such, AEA preferred to negotiate with PEEHIP staff at the “proverbial” family table. However, we have reached the point where there are things that must be said clearly and forcefully and that process begins with this issue of the Journal.

Right below the headline of the latest Advisor is a very telling word: “Editorial.” Even the author concedes that this is an opinion piece, not real news.

The article states that if AEA remains successful on appeal after winning in the circuit court, there would be a $172 million deficit created in the PEEHIP budget. AEA is amazed by how this suddenly became a budget crisis. As we previously reported last year, during hearings on the Education Trust Fund Budget, PEEHIP staff said it wasn’t an issue at all. Earlier this year, Diane Scott, Chief Financial Officer for RSA, when speaking to the Legislature about PEEHIP’s funding in the budget and the lawsuit money being held in escrow said, “We’re not counting that money.”

Scott also told the Legislature they weren’t counting the money involved in the lawsuit. PEEHIP has never had access to a dime of those funds, as they’ve been held in escrow due to the judge’s order.

PEEHIP’s own documents prove the lawsuit is not a threat to the PEEHIP budget or the Education Trust Fund. At the end of the 2017 plan year, PEEHIP had almost $324 million in cash on hand. PEEHIP expects to have over $362 million in cash on hand at the end of the 2018 plan year.

The total amount at issue in the lawsuit was $71 million at the end of Fiscal Year 2017. Those funds are still sitting in an escrow account untouched by PEEHIP. And again, according to Diane Scott’s own words, “We aren’t counting that money.”

But even if PEEHIP had to use money from its current budget to repay the lawsuit monies, it still has five times what it needs to refund all of the illegal premiums and surcharges it has collected.

Why now, suddenly, is this a crisis? The simple answer is that it is not. This is a scare tactic designed to cause educators to drop the lawsuit. PEEHIP has miscalculated again if they think educators scare that easily.

Another reason PEEHIP staff appear to be changing their strategy is that their message just hasn’t been working. For months, there have been articles in the Advisor alleging that “AEA has taken the position that there should never be a premium increase to PEEHIP participants.” At the risk of being flippant, that is a “pants on fire” lie. AEA has never and would never take such a position. They know it. You know it. It is why our members have, almost without exception, told us to keep up the fight. Thus, they are changing their message to try and sow division amongst our members and scare us into retreat.

It’s funny the PEEHIP staff never mentions what the lawsuit was really about: the PEEHIP staff violating the Open Meetings Act to ram through a premium increase without any input from plan participants. All the information about the increases was given to PEEHIP Board members in private at a secret meeting. AEA found out about it and asked to have representatives at the meeting and we were denied access. AEA knew that was illegal and Judge Johnny Hardwick agreed. That is a point that PEEHIP staff ignore because they know it puts them in a bad light.

AEA believes that pure stubbornness is driving the litigation and the increasingly hostile rhetoric coming from PEEHIP, and why they have refused to meet in good faith with AEA to try and settle the case. Staff members assured the PEEHIP Board they were not breaking the law by their scheme to rush through the increases. Now that the judge has told them they are wrong, their pride will not allow that to go unchallenged, no matter how much more PEEHIP money is spent on lawyers that could be better spent on doctors.

The most recent Advisor article concludes with “PEEHIP doesn’t like increased premiums any more than the members do, but the reality is that healthcare costs continue to rise. As a consequence, the only choices available to pay for those increases are either to cut benefits or have the members and the Legislature contribute more money.”

In fact, the opposite is true. PEEHIP healthcare costs declined in 2017 and PEEHIP projected healthcare costs to remain flat for 2018 and 2019. This explains why PEEHIP ended the 2017 Plan Year with over an $80 million surplus. We also strongly dispute that PEEHIP staff doesn’t want to increase premiums. There are those within the PEEHIP staff that think that your benefits are too generous, want to cut them, and are especially adamant about you paying more for your health insurance every time you receive a pay raise. This is why the PEEHIP staff rammed through a plan to take away most (and for some, all) of the pay raise you received from the Legislature in 2016 with no opportunity for discussion or debate.

As it has since the day the PEEHIP Board illegally met, AEA stands ready to work with the PEEHIP staff to find solutions. What we will never do is to accept a knee-jerk proposal that maximizes the financial burden on our members without exhausting all other options, which the PEEHIP staff was unable or unwilling to do. We have ideas that could help meet PEEHIP’s shortfall without unnecessary harm to your pocketbook, we just need to get the PEEHIP staff to listen.

To help get that message through, we encourage every AEA member to contact the PEEHIP Board members. Tell them, “I support AEA and its lawsuit. I expect you to direct the PEEHIP staff to mediate in good faith to find a settlement.” That’s all you need to say. Their contact information can be found at myAEA.org.

Finally, ballots are now out for this year’s election to the RSA and PEEHIP Board of Control. If you are a principal, higher education employee, or support professional, make sure you get your ballot in by the deadline, November 21 at 4:00 p.m. You can vote by returning your ballot in the mail, voting by phone, or voting online. Instructions on how to do so came with your ballot. Do your research and know who is running and, for the incumbents running for reelection, how they voted on these increases.

From this point forward, AEA will not allow lies about your Association or the PEEHIP lawsuit to go unanswered. Each time there is an article in the Advisor, there will be an article in the Journal to correct the lies so that our members will know the truth. Hopefully, the PEEHIP staff will see the light, or at least be shown the light by their Board, and the parties can reach a settlement and work on repairing our working relationship. That will be crucial with the legislative session starting in roughly two months. If not, we will always err on the side of fighting – friend or foe – for our members and will never shy away from talking about it. Stay tuned.

Date: 11/13/17
Category: Announcements, Home, Issues

Comments are closed.