Blue Cross shares how much it would pay workers to end strike

With more than 1,000 Blue Cross Blue Shield of Michigan workers still on strike after six weeks, the health insurance giant is sharing details about its latest wages and benefits offer to the union.

The proposal by Blue Cross to United Auto Workers, which represents the striking workers, calls for 23% to 33% in wage increases during the four-year contract, according to the insurer's calculations.

It also would shorten the time for Blue Cross workers to progress the salary scale to reach top pay to 10 years, down from what the union says is now 22 years.

This decadeslong wait has been an especially sore point for workers on strike, which include those in customer service, billing, claims and maintenance.

The proposal also would raise starting pay for new hires to $18 an hour from $15, and to $22.50 an hour from $18.55 for a class of customer service representatives.

And it includes a $5,000 ratification bonus for workers, plus a $750 "inflation protection bonus" for each year of the contract.

But The Blues' offer doesn't give the union everything it wants.

The proposal would keep a controversial two-tiered wages and benefits system for employees, set up in 2009, that gives lower pay and benefits for bargaining unit workers hired after a set date, originally Jan. 1, 2008.

The two-tiered system came at a time when the then-nonprofit health insurer was losing money amid the Great Recession, facing resistance from the Michigan Attorney General to rate-increase proposals, and eliminating hundreds of jobs through layoffs and buyouts.

It was also a time when two of the Detroit Three automakers were on the verge of filing for bankruptcy. And two years prior, in 2007, the UAW had agreed to the creation of a second tier for autoworkers' pay and benefits to help the struggling auto companies.

Blue Cross this week sent a letter to Blue Cross bargaining unit employees that shared details of what the insurer says it is offering the UAW at the negotiating table.

"Over the past months, management has acted in good faith and in the spirit of collective bargaining," the letter said. "We find it necessary now to go outside that process and directly to you, because we don’t believe you are being given all the information you need about what’s going on inside the room."

The UAW didn't respond Wednesday to a request for comment.

But during an Oct. 19 labor rally in downtown Detroit, UAW Local 2500 President Crystal Gilreath, who represents Blue Cross workers on strike, told the Free Press that the two sides were not close to an agreement.

"We’ve made some minor progress, I’m not going to say a lot," Gilreath said. "But like our major issues, which is ending the tiers and getting retiree health care and some job security to stop or limit the outsourcing — not much.”

Asked what reasons she was hearing from Blue Cross for not ending the tiers, Gilreath said, "They really don’t have an argument. They are basically just saying it is something they are not interested in doing.”

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Suggestions of sexism

In the letter to employees, Blue Cross also took issue with remarks made by a UAW leader at last week's labor rally, which was attended by hundreds of striking autoworkers, casino workers, nursing home workers and Blue Cross workers.

UAW Secretary-Treasurer Margaret Mock told the crowd that Blue Cross CEO Dan Loepp "wouldn’t even look me in the eye" during a meeting the day before, and she suggested that sexism was a reason. "He didn’t want to talk to me. He was looking for some of my male counterparts," Mock said.

The Blue Cross letter claims those remarks were inaccurate and unfair. It says Loepp had been invited to a meeting to meet specifically with UAW President Shawn Fain.

"Dan (Loepp) showed up but was informed that Mr. Fain wouldn’t be coming," the letter says. "The setup and outcome of that meeting undermines our process of bargaining — which should be built on trust. It hurts you — because it keeps you living on strike pay longer than necessary."

Two tiers

Starting in the 1980s, businesses in industries such as airlines, steel, auto and health care began devising new tiers of wages and benefits for their unionized workforces, with new hires generally getting less than the senior employees, according to Marick Masters, a business professor at the Mike Ilitch School of Business at Wayne State University.

“It’s a device that reduced labor costs for employers and also it enables them to preserve jobs and hire more workers,” he said. "So the union has an incentive to grant these so that they can prevent a massive shrinkage in their workforce and membership."

Workers at large nonprofits, such as hospitals and Blue Cross, were not immune, because even though their employers weren't necessarily engaged in cutthroat competition like that found in the auto industry, there was still pressure — from consumers as well as regulators — to keep prices and insurance premiums low.

Ending tiers for autoworkers has been one of the UAW's professed goals in its ongoing Stand Up Strike that began Sept. 15.

This summer, the Teamsters won elimination of a lower-paid second tier for UPS workers in their new contract.

Masters, the Wayne State professor, said the 22 years needed to progress to the top of the Blue Cross workers' current salary scale is the longest progression that he has heard of, aside from perhaps schoolteacher contracts.

Blue Cross is the largest health insurer in Michigan. Following passage of the Affordable Care Act, The Blues transitioned in 2013 to become a nonprofit mutual insurer that is no longer tax-exempt and is no longer considered the state's "insurer of last resort." It also expanded into different lines of business outside of Michigan.

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on X @jcreindl. 

∙Document: Read proposal by Blue Cross to United Auto Workers