Union seeks help with health-insurance disputes

ASEA leadership wants union health trust to open up its books

Posted: Monday, May 23, 2005

The president of the Alaska State Employees Association wants more transparent bookkeeping on the ways his union health trust spends its money.

Gordon Glaser says that the health trust, created in 2001 to provide insurance for ASEA's approximately 7,500 employees, has spent the state's and union members' money fighting disputed health insurance claims in court.

But current audits of the trust's finances do not reflect the court costs, he says.

Glaser also contends that the trust, which is autonomous from the union, will not release information to the union on how much it spends on contracts for its preferred provider, Alaska Regional Hospital.

Fred Brown, chairman of the ASEA/AFSCME Local 52 Health Trust, said he is not interested in arguing the issue in the media. But he said the union health trust gets more favorable rates from its vendors bidding for contracts because it promises not to reveal proprietary information to their competitors.

That secrecy, however, extends to its own union, Glaser says.

As with any health insurance provider, the trust has denied claims and been challenged by workers through an appeals process.

But Glaser says the panel considering the appeals is not independent from the health trust board.

"If they want to appeal a decision of the health trust for not paying for services, their choice is to appeal to the health trust board or sue them in court," he said. "There is no independent body and they won't tell us how much they are spending in legal fees."

Brown said appeals go to a board operated by the trust, then to an independent arbitrator and then to state Superior Court.

State legislators tried to enforce stricter accounting requirements this year by requiring ASEA and four other trusts in the state to submit detailed annual actuarial reviews and audits to the state Division of Insurance.

The provision, however, was stripped from an omnibus insurance bill approved last week during the special session of the Legislature.

Rep. Norm Rokeberg, R-Anchorage, said the state will send about $83 million this year to the five trusts, most of which will go to ASEA.

"ASEA supported it because they believed it would have more oversight," Rokeberg said. He says the state should know how its money is being spent.

The union pushed for the legislation this year to require the financial reports, a provision that the four smaller health trusts have argued would cut into their own members' benefits.

ASEA Business Manager Jim Duncan said the need for more financial reports and increased scrutiny of the trust is not a universally held opinion by ASEA members.

Duncan served as commissioner of the Department of Administration in 2001, when the trust was formed.

"I think it's fair to say that there are members who regret that decision and there are members who don't," Duncan said. "I'm not going to go on record on reasons for the regret."

Under the proposed legislation, the trusts would have had to provide annual audits and actuarial reviews attesting to the financial stability of the trusts.

The actuary would have described the financial condition of the plan and provided recommended changes if it were determined the trust needed to be improved to remain solvent.

Linda Hall, director of the Division of Insurance, said the division regulates more than 2,000 entities in the state that provide various kinds of insurance.

"I have no reason to think that there are any irregularities or issues with the health trust," Hall said. "This is just a sound practice."

Hall said the Alaska State Employees' Association is the largest union health trust in the state and will receive about $65 million this year.

Hall said the division's major role is to ensure consumer protection and monitor the solvency of entities that provide health care coverage.

The Alaska Division of Insurance now says it will pursue regulating the trusts through existing state laws.

The bill is House Bill 147.

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