Foothill-De Anza Community College District employs roughly 1,200 full-time and 1,400 part-time and student employees annually. The district has been self-funded for its benefits program for many years. It offers employer-paid benefits for all full-time employees and a portion of part-time employees who meet eligibility criteria.
Rising health care costs and union benefits negotiations led to projections that the organization’s benefits budget was not sustainable. That meant in just a few years either the district or its employees would have to foot the costs for an increased benefits bill.
“Our organization has a benefits program that is essentially uniform across all employee constituency groups. This means that we have been able to contain costs,” said Dorene Novotny, vice chancellor of human resources and equal opportunity at the Los Altos Hills, California-based district.
“Moving forward with a new plan solution required that we reach agreement as a team rather than negotiate individual plan solutions, which could contribute to higher costs resulting from having to administer more than one plan.”
Novotny said one of the toughest things to accomplish was recognizing what the future had in store for Foothill’s plan financially and then persuading those who were not on the Joint Labor Management Benefits Council that deep changes were necessary to preserve its benefits going forward. For instance, how could Foothill communicate with more than 800 retirees and their spouses/partners about the changes and the basis for these decisions?
But in the end, Novotny said the collaboration was worth it. Implementation of a shared governance model happened in 2012. The council, with assistance from the district’s broker, produced benefit plan design studies, benefit plan delivery alternatives, plan utilization analysis data and more to help identify potential solutions.
The labor-management team is confident changes are on target, and it is committed to moving forward in the best interests of all benefit recipients. It will continue to study cost structures and modeling scenarios and be particularly attentive to health care reform and the effect it could have on future decisions.
The joint labor council “meets regularly to review implementation issues, concerns that arise periodically with benefit members, and policy and procedures that must be adjusted to respond to new issues and demands,” Novotny said. “The platform has allowed us a venue to address issues collectively, and our charter defines the process for decision-making.”
Foothill’s benefits program realized a $4 million savings in the first six months, and a projected cost escalation of $109.3 million over 25 years is now down to $84.8 million.
For its joint effort between management and labor, Foothill-De Anza Community College District is the gold Optimas Award winner for Partnership.