Green Room

Wisconsin’s largest teachers’ union is an extremely profitable insurance business that happens to provide services to children on the side

posted at 9:51 am on February 27, 2011 by

Like me, you may be a little confused about the nature of the fight between the public sector unions and Wisconsin Republicans. After all, the unions are just upset about having to pay for some of their benefits, right?

Wrong.

…the Wisconsin Education Association Council, the largest teachers union in the state, has grossly abused [collective bargaining] for decades, resulting in the unnecessary siphoning of millions of dollars from Wisconsin public schools. Under current Wisconsin law, the [choice] of the insurance company that provides health coverage to school employees is a matter of collective bargaining in each school district.

In the majority of districts around the state, WEAC negotiators have used that law to pressure local school boards into purchasing coverage from WEA Trust, an insurance company established by and closely associated with the union.

WEA Trust offers very comprehensive health coverage, at a very high cost to schools… A few dozen districts have managed to dump WEA Trust insurance over the past few years [and] they managed to save at least six figures their first year with a different carrier, and maintained steady rates in subsequent years, while still offering quality health coverage to employees.

Officials from other districts say they’re also eager to dump WEA Trust coverage, but need their employees’ anonymous claim histories from WEA Trust to share with other bidders. Several say they have never requested that information because they were told WEA Trust would punish them by pulling them out of local insurance pools, resulting in skyrocketing premiums.

Today many Wisconsin school boards consider themselves stuck with expensive WEA Trust health coverage, until state law is altered to take the identity of the insurance carrier off the collective bargaining table. Gov. Scott Walker’s current legislative proposal would do just that, giving school boards the opportunity to freely shop for insurance and save millions of tax dollars for instructional purposes.

Governor Walker has cited WEA Trust as a primary reason for reforming collective bargaining.

WEA Trust has grown very fat on public school dollars, with a net worth of $316 million and a team of 12 administrators all receiving compensation packages worth six figures per year… Sadly, this insurance swindle is endorsed by state law.

…most unions have traditionally come to the negotiating table demanding expensive WEA Trust insurance coverage, and the strategy has been effective. About 64 percent of Wisconsin’s 426 districts carry WEA Trust insurance, despite its prohibitive costs.

…WEAC pressures its local union officials to stick with WEA Trust. One district administrator told us about a meeting where everyone present, including union employees, agreed that a non-WEA health plan would be better for the district. He said state WEAC representatives were present and argued in favor of WEA Trust, just because it’s the union’s insurance brand.

…With the law on their side, many local unions won’t even consider alternative health coverage. They refuse to have the WEA Trust language taken out of their contract at bargaining time. If a school board wants to contest the coverage, the unions will frequently take the fight to arbitration.

Many school officials accuse WEA Trust officials of purposefully withholding insurance claim histories from districts that want to seek other insurance bids. That makes it nearly impossible for competing companies to prepare informed bids based on recent insurance activity in a district. It would be like asking a contractor to bid on a demolition project, without disclosing the size or condition of the building.

Those districts that seek claim histories are often threatened with higher insurance rates by WEA Trust, according to several sources.

This fight is about more than just benefits: it’s about a rigged insurance operation that no one in their right mind would choose if given a real choice in the matter.

WEA Trust stands to lose millions through Governor Walker’s heroic actions on behalf of the taxpayer – which is why the union bosses have reacted with violence, angry rhetoric and near-riots in the state capitol.

It has nothing to do with the kids. The union bosses want to steal more of your money with a crooked and rigged insurance scam.

 

Cross-posted at: Doug Ross @ Journal.

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Crooks?

jeanie on February 27, 2011 at 10:50 AM

he tried to explain this on meet the press this am…wish he pushed harder on this…

cmsinaz on February 27, 2011 at 11:02 AM

Call Glen. He’ll get out his blackboard and make it all clear.

jeanie on February 27, 2011 at 11:08 AM

This insurance company must have been the template for Obamacare. Do the good people of WI now see the tangled web the union has woven? They better hope their governor doesn’t cave.

Kissmygrits on February 27, 2011 at 11:21 AM

My goodness, no wonder the union thugs are all out in force against Gov. Walker! Please Gov. Walker, don’t cave to these thugs.
L

letget on February 27, 2011 at 12:05 PM

Can the RICO Act apply to government employees? The unions are nothing more than an arm of the Democrats these days.

angelat0763 on February 27, 2011 at 12:14 PM

In Michigan it is the MESSA plan.

$8,000 BCBS policies repackaged through the union created entity for $13,000.

At one of the rallies yesterday a teacher told me it wasn’t taxpayers paying that extra.. hello disconnect?

Jason Gillman on February 27, 2011 at 12:24 PM

Public union heads are not any more greedy than anyone else. The key difference is that they have been given the power to act upon their greed through collective bargaining. Unanswerable to their fellow citizens; only answerable to their union members.

PackerBronco on February 27, 2011 at 1:06 PM

Can the RICO Act apply to government employees? The unions are nothing more than an arm of the Democrats these days.

angelat0763 on February 27, 2011 at 12:14 PM

Let’s see…the government engages in:

Theft (income taxation)

Ponzi pyramid schemes (social security, et. al)

Bank Collusion (Federal Reserve)

Price fixing (medicare, Obamacare, et. al)

and a bunch of other crimes I can’t think off right off the top of my head. Don’t hold your breath.

gryphon202 on February 27, 2011 at 3:11 PM

Time for some Trust-busting.

John the Libertarian on February 27, 2011 at 7:37 PM

jsonline.com (Milwaukee Journal Sentinel) has not covered this at all. It’s come up in comments a few times – and you should see the response!

http://www.jsonline.com/news/wisconsin/117008863.html?commentSubmitted=y&refresh=26844#comments

Daisy_WI on February 27, 2011 at 9:56 PM

Thanks for addressing this. Here is a link with all the information on this scandal. This needs much more exposure!

http://www.publicschoolspending.com/wp-content/uploads/2010/11/WEATrustfinalreport1.pdf

Conservalicious on February 28, 2011 at 1:40 AM

WEA Trust has grown very fat on public school dollars, with a net worth of $316 million and a team of 12 administrators all receiving compensation packages worth six figures per year…

I’m sure Obama will criticize the fat cats who run this insurance company any day now….

Pervygrin on February 28, 2011 at 12:43 PM

Let’s see…the government engages in:

Theft (income taxation)

Ponzi pyramid schemes (social security, et. al)

Bank Collusion (Federal Reserve)

Price fixing (medicare, Obamacare, et. al)

and a bunch of other crimes I can’t think off right off the top of my head. Don’t hold your breath.

gryphon202 on February 27, 2011 at 3:11 PM

Don’t forget the conflict of interest of a government that dictates what the people can have as a counterbalance to governmental power – vis a vis the first and second amendments.

Insert witty screen name here on February 28, 2011 at 3:20 PM

Omg, this deserves a lot more attention.

Let’s face it, it is likely they routinely do this in many states….

perries on February 28, 2011 at 4:40 PM