News
Jun 24, 2015

HSPBA Update JHSBT: a new structure for better, more secure benefits

Your Joint Health Sciences Benefit Trust (JHSBT) Working Group has been making a lot of progress recently—both in establishing the trust itself and in securing important provisions for the negotiated trust language. Key achievements reached during the last 18 months of negotiation include:




    1. A better trust model: the JHSBT is an Employee Life and Health Trust (ELHT) rather than the traditional health and welfare benefits trust. By negotiating the ELHT model, the new plan will be able to take advantage of more favourable tax treatment on investment income. It will also be allowed to accumulate surpluses and reserves in a manner not permitted under the traditional health and welfare trust model.


 


    1. Sustainability: The ELHT model is a more sustainable arrangement for health and welfare programs only recently permitted under federal statute. These new rules were a concession by the federal government during the near bankruptcy of General Motors in 2009. The new rules only apply to new health and welfare trusts – including our JHSBT.


 


    1. More flexibility for members: The ELHT model gives trustees more flexibility in managing and planning changes and improvements to the benefit plan going forward. Under a yet-to-be determined fixed funding formula (expressed as a fixed percentage of regular straight-time payroll) trustees will be required to operate within a fixed income stream. However, having the tools to create contingencies and reserves as permitted under an ELHT will result in more certainty and stability for the JHSBT in the years ahead. This means that members can continue to count on a good quality benefit plan – a high priority for HSPBA and its CUPE members.


 


    1. Improved oversight: As partners in the JHSBT, trustees for the Health Sciences Professionals Bargaining Association (HSPBA) will have access to financial and claims data information as never before. Full disclosure of this information will allow for better oversight and help shape policies that better serve the needs of plan members. The partnership created by the JHSBT means the HSPBA will finally be on equal footing with the Health Employers Association of BC (HEABC) regarding the benefit plan – similar to the Municipal Pension Plan partnership which has been in place since 2001.


 


    1. Better value for service: Trustees will be responsible for all aspects of the relationship between the JHSBT and contracted service providers Pacific Blue Cross, Great West Life and the Health Benefit Trust. As owners of the benefit plan data, the JHSBT can ensure good value for the services provided. This means there will be competition for our business and an opportunity to see what innovations are available in the benefits field. Like most industries, technology is driving rapid changes in service delivery models world-wide. The insurance and benefits industries are no different, and some of these innovations should yield benefits for both members and providers of benefit plans.


 


    1. A surplus from the LTD plan: Since mid-2006, members have paid 30 per cent of the cost of premiums for the LTD plan. Last July, as part of our due diligence for the JHSBT, HSPBA became aware that LTD premiums began generating surpluses in late 2012. The surpluses were a result of excellent market returns, (the BC Investment Management Corporation manages the funds – the same people managing your pension plan investments) and lower than expected LTD claims experience. Anticipating that this trend would continue – and on the advice of our legal, actuarial and benefit advisors – HSPBA secured an agreement for a Member Premium Trust Account. This account secures and segregates these monies for the exclusive administration for members by the HSPBA trustees once the JHSBT is operationalized in April 2016. While it is difficult to know just how much money this will generate for the Member Premiums Trust Account, it should go a long way to provide benefit security for HSPBA members right through to the expiry of the current collective agreement in 2019. The parties to the JHSBT (HSPBA and HEABC) then return to the bargaining table.



Who else sits on the trust is a decision of the HSPBA and HEABC as the parties and appointing authorities for the JHSBT. As far as trustees from the member unions are concerned, the incumbent trustee for CUPE, National Representative Troy Clifford, will continue in this role. Additional interim trustee appointments include most of the Working Group members who have been working on this project since the beginning of last year, including Brother Clifford. Subsequent appointments would be for three years with renewals.  On June 22, the union members on the board were announced.

The JHSBT will be governed by a Board of Trustees with an equal number of trustees appointed by HSPBA and HEABC, and members of the HSPBA Working Group have now been selected to act as interim trustees.

The Working Group members and interim trustees are:



    • Jeanne Meyers, HSA

 

    • Dennis Blatchford, HSA

 

    • Alison Hietanen, HSA

 

    • Troy Clifford, CUPE


Before the JHSBT goes live next April, we will need to do a re-enrolment of members. That will mean issuing new pay-direct cards and some type of re-enrolment process. We are actively discussing this issue with our advisors and benefit providers to determine the best approach. When those details are worked out, a communication plan will be rolled out to members and employers to ensure an orderly transition to the new identification system. Stay tuned for more information on the re-enrolment in the coming months.

For more information, please contact Troy Clifford at tclifford@cupe.ca or your respective CUPE Local HSPBA representative. 

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