Carleton’s undergraduate and graduate student unions are in conflict over a change to their joint student health plan.
The Carleton University Students’ Association (CUSA) has terminated its contracts with Green Shield Canada, the health plan provider, and Morneau Sheppell, the insurance brokerage company, according to CUSA vice-president (finance) Michael De Luca.
CUSA councillors met July 27 and amended the meaning of ‘referendum’ in the CUSA bylaws, so a referendum amongst the Board of Trustees could be held to terminate contracts related to the joint health, dental, and accident plan.
CUSA is now moving forward with Student Care, an to implement a health plan for Sept. 1. Student Care is currently working on CUSA’s behalf to establish an insurance plan with Desjardins, De Luca said.
Students will find out about the changes to the plan this September through a strong communications campaign, De Luca said.
The decision to make a health plan change over the summer without a student referendum is “highly problematic and calculated,” Graduate Students’ Association (GSA) president Kelly Black said.
The motion to change the meaning of ‘referendum’ passed with 19 councillors in favour, and 10 against, De Luca said.
However, there is disagreement about the meaning of ‘referendum.’ A change in the health plan would require a referendum of CUSA’s membership, Black said.
The agreement signed between CUSA and the GSA in 2000 is still in “full force and effect,” Black said. “Referendum was never meant to mean three members of the CUSA’s Board of Trustees.”
The GSA will not join CUSA in the new plan, and would pursue any necessary legal action against CUSA, Black said.
“Frankly, we would be derelict in our duties to our students to take this five-year plan that CUSA has chosen to turn to,” Black said.
With Student Care, students will now be able to receive opt-outs via direct deposit and customize their coverage online, De Luca said via email.
CUSA has negotiated with Student Care to include the dental and optometry enhancements that were part of the Morneau Sheppell agreement, De Luca said.
According to a CUSA membership advisory, undergraduate students tend to make fewer insurance claims than graduate students. This means that if graduate students had a separate health plan, they would pay a higher premium.
The advisory says graduate students have avoided this by being included in the CUSA health plan and “passing on their higher insurance costs to the undergraduate population.”
By switching to the new plan, every graduate and undergraduate student would save $17.30 per year However, if the GSA pulls out of the plan, each undergraduate student would save $28.15 per year, De Luca wrote.
The estimated cost of a legal battle would depend on the actions of Morneau Sheppell and the GSA, De Luca said. “If they choose to make this as confrontational as possible, CUSA has performed a reasonable worst-case analysis with its legal counsel.”
De Luca could not disclose the figures due to legal considerations.
“The actions of the GSA to date […] should all give us pause about the relationships GSA has with these companies and what the underlying motivations actually are,” De Luca wrote.
The past broker had an inferior and more costly plan, De Luca said.
De Luca called the agreement between CUSA and the GSA “predatory” and said the referendum clause is “abusive” and “intended to make it highly onerous” for CUSA to exit the agreement.
“The partisan nature of CUSA council is really present,” Black said. “You have people from last year that would have condemned last year’s executive for anything that they did and praise this year’s executive for anything they do.”
CUSA approached a single broker and did not perform a tendering process, Black wrote in the GSA open letter July 31. A tendering process occurs when an organization puts out an official invitation for applications from service providers.
Partisanship played no part in the decision to change the health plan, De Luca said, adding that decisions were made in consideration of cost-benefit to students.
Undergraduate students will continue to receive the same coverage without disruption for the upcoming school year, according to a letter to CUSA from Student Care confirming coverage.
CUSA has brought in an independent pharmaceutical expert to perform an analysis between the two plans to ensure they are exactly the same, De Luca said.
“We’re not willing to take our membership down a path of unknowns for the word of Michael De Luca.” Black said.
“Basically they’re saying ‘Trust us.’ If the health plan is all the CUSA executive claims it to be, then they should be willing to take it to the membership in October or November,” Black said.
CUSA terminated the $8M agreement with Morneau Sheppell on a “matter of principle” that the agreement was “entered into under highly irregular and suspicious circumstances” and was not approved by a governing body, De Luca wrote.
“We nevertheless hope that Morneau Sheppell will understand why this contract had to be terminated,” De Luca wrote.
