June 22, 2016

Bargaining Update

Let's Talk About Healthcare

IAPE members — yesterday, the Company provided the Union with their proposal for healthcare coverage in 2017.

Well, most of the details. Except to inform us that the Dow Jones "goal" is to have employees eventually pay 25% of healthcare premiums, they were not able to say yesterday what those premiums will be, or what employees' share will be in 2017 — and they won't provide those projections until, perhaps, our contract bargaining meeting on July 5th.

(An aside to IAPE members in Canada — we have a good idea how much Dow Jones wants to charge you for your 2017 healthcare coverage. More on that, below.)

So, apart from learning the Company's stated goal in further shifting costs onto employees ("the industry standard is 25-30%," they say), the other important takeaway from yesterday's meeting was this: they only have healthcare plans in place for 2017. While we discussed the Company's assumption (they would say "conservative," we might say "faulty") that the excise tax component of the Affordable Care Act will take effect in 2020, the rest of yesterday's healthcare discussion revolved around plan design for next year, and next year only.

We began yesterday's meeting with a discussion of healthcare cost trends. Dow Jones presented information from their healthcare and benefits consultant, Willis Towers Watson in an attempt to support last week's statement from Mark Musgrave in his note to all employees:

"Since 2007, healthcare costs across the US, have increased at a range of 6 to 9% annually, and we expect this trend to continue for the foreseeable future. We need to closely monitor costs for our benefits offerings."

This information is at odds with U.S. government data — which, conveniently, is often reported on in the pages of The Wall Street Journal — which shows healthcare cost growth has been at all-time lows in recent years, and that there is no reason to believe year-over-year cost increases will return to anywhere near 9% in the next few years.

The Company provided their proposal for plan options in 2017. The current POS with HRA option is unchanged, the current CDHP with HSA option would see the employee's share of coinsurance reduced to 20% from 30%, and Dow Jones has proposed a new "low cost" CDHP with 30% employee coinsurance, high deductibles and out-of-pocket maximums, and no out-of-network coverage.

There are no proposals for 2017 changes or cost increases to current vision or dental coverage.

The Company is proposing new "offerings" for its plans, intended to increase "cost avoidance," including access to second opinion and decision support, 24/7 concierge medicine for employees in metro areas, and in-vitro fertilization support services to plan participants.

(To clarify, IVF is a component of DJ healthcare now, and the Company is not proposing any changes to those benefits. The additional offering above is access to fertility services "to help avoid the necessity of in-vitro fertilization, coupled with a vendor to make the best use of those benefits by steerage to the right service at the right provider.")

We asked whether Dow Jones had considered a long-term care option. They informed us that they had, but that many providers are folding and that there are not many carriers still offering long-term care. Still, we can explore coverage as an additional option.

The Company proposed minor tweaks to the handling of other benefits — moving HSA administration to Fidelity and FSA, physical fitness and back up child care reimbursement away from Discovery Benefits and over to Wage Works.

The Company proposed moving away from the current life insurance for IAPE-represented employees and over to the current corporate plan. This would result in a reduction to basic life insurance (from 1.5 times salary to 1 times salary), but an enhancement to supplemental life insurance and dependent insurance. This, of course, is proposed with a bargaining waiver (as are all benefits in this package).

Management proposed a "simplification" of short-term disability, away from the current benefit increasing after each year of service (up to 11 years) to a three-tiered payment eligibility.

Employees with 0-5 years of service would be entitled to 8 weeks of disability at 100% pay and 18 weeks at 60%. Employees with 6-10 years of service would receive 16 weeks at 100% and 10 weeks at 60%. Short-term disability for employees with 11 or more years of service would be unchanged at 26 weeks of 100% salary.

The Company has also proposed elimination of the "rolling month" calendar provision, and would base each payment period on separate instances of disability.

Finally — for U.S. benefits — DJ proposes certain requirements for book leave, military leave, personal leave and education leave: one year of service before being eligible for leave, return to work for one full year before taking another leave, and a limit on education leave of six months.

On benefits for employees in Canada, Dow Jones has proposed further coordination of healthcare with Harper Collins and the introduction — for the first time — of monthly medical and dental premiums for plan participants. For a guideline, we were informed that Harper Collins monthly premiums for employees in Canada this year are $12.31 for single coverage, $24.62 for employee + 1 and $40.62 for family.

Monthly rates for dental coverage are $5.32 for single coverage, $10.65 for employee + 1 and $24.29 for family.

To estimate employee costs for 2017, Dow Jones explained that Harlequin Canada typically increases premiums between 1.5-2.5% each year.

There were no other proposals to modify Canadian healthcare coverage, though management did propose "flexibility" in creating a "harmonized News Corp retirement plan" similar to the structure in place in the U.S.

After our discussion of healthcare coverage, Dow Jones representatives provided the Union with verbal responses to our first proposal document. Except for our proposal to include the term "gender identity" in our current Nondiscrimination contract clause, all Union proposals were rejected.

Some highlights from management's responses:

* Overtime eligibility for all employees would be "prohibitively expensive" for Dow Jones — not to mention that salaries for overtime exempt employees are already based on the understanding that those employees are not eligible for overtime (in other words, they believe you're already paid enough to work 50 or 60 hours each week).

* Shift differential, standby pay and wages are economic items which should be discussed at a later date.

* The Union proposal to increase salaries of current employees to median rates in the event salaries of new hires exceed those established staffers is "unworkable." The Company believes the flexibility to determine pay rates is best left in the hands of managers (Cough, cough).

* There is no need to eliminate the salary cap on vacation sell back, because we just recently agreed to the current $1,000 level (in 2010 — you know, the last time we engaged in full contract negotiations).

* Annual changes to incentive plans should not require agreement with the Union.

* It is not appropriate to restate law on pay equity in the Union contract.

Speaking of pay equity, when the conversation turned to discussion of management's first proposal package, the Company acknowledged their proposal on pay equity is "not a fully-baked plan," and that they are "actively still looking into" IAPE's pay disparity claims, and ways to address the issue.

Other responses of note to IAPE questions about the first Dow Jones proposal:

* The Company proposal on "overtime flexibility" is not a proposal to increase workweeks to 40 hours, but a conversation starter to find a way to compensate those who work more than 35 hours (our contract workweek) without paying time-and-one-half until exceeding 40 hours (the overtime threshold under U.S. law).

* Dow Jones wants to use "merit as (the) first criterion" during layoffs as a means of keeping "the best person for the job." Which, apparently, are not the people who have been doing the job for many years.

* The special relocation benefits addressing moves between New York and South Brunswick is an outdated contract benefit — Dow Jones has no plans for large-scale moves of departments to South Brunswick.

* The Company sees extension of probationary period to one year as a benefit to new employees, giving them time to "turn things around" if necessary — all the while being fully aware the provision would eliminate the Union's ability to defend those new employees against claims of poor performance during months 10 through 12.

* The proposal to make scale progression for reporters "discretionary" is an attempt to correct the error made in 2011 when we first agreed upon our scale and tier structure. Great, so let's fix the error — and not penalize reporters deserving of advancement to the next step on our introductory scales.

And that, dear members, was that.

Your IAPE team will take information gleaned during yesterday's meeting and put that toward drafting revised proposals for our next bargaining session, scheduled for tomorrow in South Brunswick.

As always, your feedback and input is appreciated. If you have comments, questions, suggestions or complaints, please contact the Union office.