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State Employees Association of North Carolina, SEIU Local 2008 1621 Midtown Place, Raleigh, NC • 800-222-2758 • 919-833-6436 • Circulation 55,000

December 2013

• Vol. 32, Issue 2

Cowell Protects Hospital Profits at Employees’ Expense Treasurer Denies SEANC Proposal to Have Hospitals Pay Their Fair Share to State Health Plan By Toni Davis SEANC Communications Director

State Treasurer Janet Cowell, who has the sole authority to determine what topics are heard before the State Health Plan Board of Trustees, denied SEANC the opportunity to propose numerous cost-savings measures during its Nov. 22 meeting on benefit changes. Prior to the meeting, SEANC Legislative Director Ardis Watkins submitted 13 items for the board’s consideration that could provide benefit enhancements and assist plan members along with proposals to pay for SEANC’s suggestions. After Cowell screened SEANC’s proposals in order to determine if they were “benefit changes,” SEANC was alloted 15 minutes to discuss five proposals. Eight other ideas on how to pay for benefit changes were deemed “policy changes” that could be discussed at a yet to be determined date. The biggest-ticket proposal that SEANC was prepared to offer would link hospital reimbursement rates to a percentage of Medicare rates, 110 percent. This would save $300 to $400 million annually, which could then be used to pay for benefit changes offered by the association. “It’s hard for a board to endorse benefit changes without knowing how they are going to pay for them. There was no good reason to deny our proposal that would make hospitals pay their fair share for the State Health Plan,” said Watkins. “Without cost-saving ideas, Cowell can

Benefit Changes Proposed by SEANC

Legislative Affairs Director Ardis Watkins proposed a number of benefit changes for members at the Nov. 22 State Health Plan Board of Trustees meeting, including: • Returning to a premium-free 80/20 PPO plan • Reducing generic co-pays on prescription drugs from $12 to $10 • Eliminating so-called wellness surcharges for failure to designate a primary care physician or complete a health assessment • Instituting positive cash incentives for designating a primary care physician and completing a health assessment • Covering applied behavioral therapy for children with autism • Establishing a combined medical and pharmaceutical maximum out-of-pocket limit not to exceed $5,000 annually per member • Providing or studying the option of a Medicare supplemental policy and/or cash benefit for Medicare retirees with automatic adjustments for health care inflation, age and adverse risk • Offering a PPO 80/20 option for retirees wishing to remain in traditional Medicare

simply listen to our proposals and then later tell the board and the General Assembly we don’t have any money for benefit enhancements.” Watkins noted in her remarks that the State Health Plan is currently operating at an $800 million surplus. “The plan is not a gift,” she said. “It is a benefit of employment,” and instead of working to benefit its plan members, the state is intent on shifting costs to state employees and keeping any changes that would involve private contractors, hospitals or vendors off the table. During the meeting the board discussed one item that was offered by the association — wellness surcharges which SEANC proposed to eliminate in favor of a premium-free 80/20 PPO plan. The North Carolina Association of Educators, who did not send a representative to the board meeting,

had teacher views expressed by trustee Kim Hargett, who surprised SEANC representatives when she noted that teachers liked wellness surcharges associated with activities, like a health care assessment, that if not completed cost employees money. This is in direct contrast to SEANC members’ experiences described to the board by SEANC Past President and board trustee Charles Johnson. “The average state employee views these wellness surcharges as a choice between eating and paying the rent,” he said. “That’s how the average member feels. They want to know why the State Health Plan is sitting on nearly a billion dollars and still hitting employees with surcharges. We want the plan to help the average state worker.”

Counselor’s Comments By Tom Harris

SEANC Chief of Staff/General Counsel

Pressure Helps Commission to Follow the Law


ne of the important roles that SEANC plays for its members is being a watchdog over boards and commissions that set policies and adopt rules important to state employees’ working conditions and benefits. Among the groups SEANC watches are the State Health Plan Board of Trustees, the Retirement Systems Board of Trustees and the State Human Resources Commission. Recently, SEANC challenged the process by which the State Human Resources Commission (formerly the State Personnel Commission) was taking certain actions and, after initial resistance, the SHRC corrected its course of action. At its Oct. 17 meeting, the SHRC adopted new policies to implement the changes made during this year’s legislative session to the State Human Resources Act (formerly the State Personnel Act) without giving the public, including SEANC, an opportunity to review Harris and make comments on the proposed policies. I spoke on SEANC’s behalf at that meeting and informed the SHRC that the state’s Administrative Procedures Act did not allow it to adopt enforceable policies until the policies had been first adopted as rules – using the correct statutory procedure that allows public notice and comment. The SHRC adopted the policies, nonetheless, and then instructed the Office of State Human Resources to begin the statutory process to adopt administrative rules. After the meeting, I notified the attorneys representing SHRC and OSHR that SEANC would consider filing a lawsuit to stop the enforcement of the new policies if they tried to enforce them without first going through the process to adopt the policies as rules, because SEANC still had not been given the opportunity to review and comment on the policies. In response, OSHR filed the new policies with the state’s Codifier of Rules as “emergency rules,” another process that precludes any comment by the public on the rules before they become enforceable. The Codifier then had two days to ascertain if the proposed rules fit the statutory definition of an “emergency,” which is whether they are required by a “serious and unforeseen threat to public health, safety or welfare.”


The Reporter • December 2013

I submitted comments to the Codifier, pointing out that the SHRC had never made any finding that an emergency existed and had not even adopted these policies as emergency rules, both actions required by statute. Instead, it had simply instructed the OSHR to begin the process to adopt the rules. I also argued that the threats, if any, to the public were not “unforeseen” since the SHRC had known about the need for these rules since the statute enacting the SHRA changes had become effective more than two months earlier. The Codifier agreed that the need for the rules was foreseeable and, thus, sided with SEANC in objecting. Upon learning that state law still permits the SHRC to insist that the Codifier put these proposed emergency rules into effect in spite of the objection, I informed the attorneys for the OSHR and SHRC that SEANC would consider filing a lawsuit, as permitted by statute, to seek a court order stopping the rules’ enforcement if they, in fact, did asked the Codifier to go ahead with putting the rules into effect. I also told them that if they would simply go ahead with the process for adopting temporary rules, SEANC would not consider a lawsuit necessary since that process would give SEANC what it had been seeking all along: simply the right to review and comment on the policies before they become enforceable. To its credit, the SHRC has apparently chosen to utilize only the temporary rulemaking process and chosen not to pursue emergency rules any longer. So what about the proposed rules? Are there provisions that may have an unnecessarily negative impact on state employees? While the majority of the proposed rules correctly track the statutory changes, there are a few that merit serious comment. What matters the most for now, however, is that SEANC and other members of the public will be given their legally required right to make these comments before the rules are adopted and the policies become enforceable. The Reporter, USPS 009-852 (ISSN 1069 2142), is published nine times a year in the months of February, March, April, May, June, July, September, November and December for $2.50 per year, per member, by the State Employees Association of North Carolina, Inc., 1621 Midtown Place, Raleigh, N.C. 27609. Periodicals postage paid at Raleigh and additional offices. POSTMASTER Send address changes to: THE REPORTER, 1621 Midtown Place, Raleigh, NC 27609

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No Cost-of-Living Adjustment from Investment Gains Actuarial report shows plan is better funded, but still recovering from recent down years by Jonathan


SEANC Asst. Director of Communications

State retirees will have to rely on the General Assembly to fund a cost-of-living adjustment this year in order keep up with increasing prices. Even though 2012 was one of its best performing years since the recent recession, the Teachers’ and State Employees’ Retirement System did not produce the return necessary to fund a cost-of-living adjustment on its own according to an actuarial report given at the Retirement Systems Board of Trustees meeting on Oct. 17. The report showed that the system reported a market value return of 11.8 percent in 2012, better than the expected 7.25 percent. However, since the system is still making up for losses in 2008 and 2011, those gains were not enough to provide for a 1-percent COLA for retirees, which is estimated to cost around $136 million. State payroll contributions to the system were also down for the year. Continued reductions-in-force and limited

Retirement Planning

promotions mean that less money is being put into the system by active employees. Overall the plan is better funded, and the projected increase for the Annual Required Contribution (ARC) is 8.76 percent, down from an original projection of 9.72 percent. The plan’s funding level is 94.2 percent, up from a 92.6 percent projection. As always, SEANC will advocate for a cost-of-living adjustment from the General Assembly when it reconvenes in May. SEANC has long advocated for the moving of the retirement system from a sole fiduciary system, where the state treasurer has sole control over investments of the plan, to a board system that would provide checks and balances and allow for better oversight of employees’ pensions. SEANC fully expects retirement to be a big topic of discussion next May when the legislature returns. Our lobbyists will be on the ground to ensure that the promises made to retirees are kept. THE

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The Reporter • December 2013

State Employees Association of North Carolina 1621 Midtown Place • Raleigh, NC 27609 Telephone 919-833-6436, 800-222-2758

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Toni Davis, Editor-In-Chief Jonathan Owens, Managing Editor Alicia Miller, Associate Editor Beth Dew, Associate Editor


Advertising Policy SEANC accepts advertising material from companies and persons seeking to communicate with SEANC members. Acceptance of this advertising does not indicate SEANC approval or endorsement of any representation that the message, product or service is as represented by the advertiser. SEANC accepts no responsibility and shall not be liable for any use of or reliance on any such information, product or service. SEANC is a private entity and is under no obligation to carry advertisements of any nature, political or otherwise, that may be viewed as contrary to the interests of the association and its membership.




District 58 member Pam Hailey presented a $200 check and numerous items to Jessica Toole of the Me Fine Foundation on behalf of the district. The mission of the Me Fine Foundation is to provide resources and financial assistance to parents and caregivers with children being treated by Duke and UNC Children’s Hospitals and is financed through the generosity of contributors, fundraisers and operation of a thrift store.

District 17 Chairman Sager Furr (left) and member Tracy Dailey discuss SEANC benefits with Tekesha Hammond (right), who joined SEANC at the N.C. Correctional Association Conference on Nov. 21-22 in Greensboro. District 17 member Gracie Adams also recruited new members at the event.

Member Spotlight

District 65’s Tuthill is Devoted to Giving Back to Community by

Genevieve Bot Correspondent

Lynn Tuthill has a deep passion for giving back to her community, and that dedication has encouraged her district to join her in her charitable involvement. Tuthill, an administrative support specialist and 21-year SEANC member of District 65, which represents workers at East Carolina University in Greenville, has a Tuthill passion for SEANC and for community outreach. Because of her dedication, her district is able to perform a community project at least once a month in Greenville. District 65 members have been involved in food drives, Children’s Hospitals, Habitat for Humanity and keeping streets clean with the Adopt-aStreet program.

Tuthill formed the Purple and Gold Crusaders team for Relay For Life, which is comprised of SEANC members and their families, and it has raised over $100,000 in the last 20 years. With her help, District 65 also donated funds to Vidant Children’s Hospital during the Children’s Miracle Network Annual Telethon. Each holiday season, the district sponsors Christmas for two children. They also build miniature Christmas trees to distribute at local nursing homes to brighten the residents’ days there. Her hard work hasn’t gone unnoticed. Last year, District 65 won a SEANC District of the Year award in part for their contributions to the community. Personally, Tuthill contributes to Stop Summer Hunger, an important program for nutritional needs of children who aren’t able to access free and reducedprice meals when school is not in session. She also managed to make time

to volunteer at the Ronald McDonald House, preparing meals for families in need. Tuthill takes pride in what she does and finds it rewarding. She said she is grateful for the productive and supportive group of SEANC members in her district and is always reaching out to both non-members and members. Recently she also coordinated a member benefits fair in Greenville. “One person can do things on their own but for it to be really successful and to make a difference it takes a group of volunteers,” Tuthill said. “I am very proud to be a SEANC District 65 member and to serve with our board that are right by my side on every project to give back to our wonderful community. We pull together as a team and with each community service we do it drives us even more to find new things. I would like to challenge each district to get involved in their community!” The Reporter • December 2013



Four from SEANC Families Win SEIU Scholarships 2014 applications now available to members and dependents; deadline to apply is March 3 by

Beth Dew

SEANC Communications Assistant

Paying for college got a little bit easier this year for four SEANC families thanks to scholarships from Service Employees International Union (SEIU). Each year SEIU awards more than 50 scholarships to those who wish to continue their education. As an affiliate of SEIU, SEANC members and dependents can apply for a scholarship through SEIU’s five scholarship programs, and this year four SEANC members’ children won! Three of SEANC’s recipients received $1,500 one-time nonrenewable scholarships. Kristin Roman, daughter of District 66 member Lori H. Roman, is an elementary education major attending East Carolina University. Shekera Haynes, daughter of District 22 member Donna Menefee, is in the nursing program at Wake Technical Community College. District 66 member Rosa Chapman’s son, Tyler Chapman, is majoring in business administration with a concentration in finance at Morehouse College in Atlanta, Georgia.



Spencer Johnson, son of District 6 member Kristie Murley-Johnson, received a $1,000 renewable scholarship. Currently attending Western Carolina University, Spencer is planning to major in recreation therapy with a minor in sociology. How to Apply for 2014 Awards SEIU scholarship applications for 2014 should be filed online by midnight March 3. In order to qualify for one of SEIU’s lottery scholarships, which are awarded without regard to sex, race, religion, national origin, sexual origin, age or disability, you must be a member of SEANC for three continuous years as of Sept. 1, 2014. To be eligible for the scholarships, applicants must be enrolled as a fulltime student for the fall semester of 2014 at an accredited two-year or fouryear college, trade or technical school. Renewable scholarships are available


to incoming first-year students. Nonrenewable awards are available to sophomores, juniors and seniors. In addition, all applicants must pass a quiz on the SEIU 2012 Four Year Report and correctly answer all the questions on the SEIU lottery scholarship quiz and application. Graduate students are not eligible to apply for these scholarships. SEIU also offers four competitive scholarships worth up to $5,000 per year. For more information on SEIU’s scholarship program including links to online applications visit the “member” page of the website at scholarships. Applying for an SEIU Scholarship does not disqualify members from SEANC’s scholarship program. Members and dependents are eligible for both awards.

Check your State Health Plan card!

Several members have noticed that their State Health Plan insurance selection, administered by State Treasurer Janet Cowell, is wrong on their new insurance cards for 2014. Read your new card and verify that the selection that you have made is the one that is on your card. If your selection is wrong, then the deduction from your December paycheck could be wrong, too! If you have an error on your health plan card, fix it by calling 855-859-0966.


The Reporter • December 2013



Quotes to Note “State employees should be hired based on what they know, not who they know. No public service job should be awarded on partisan politics, and it is illegal to do so.” Executive Director Dana Cope in an Oct. 25 McClatchy-Tribune News Service article, “State GOP helps McCrory fill government jobs”

“I know I wouldn’t be, like, juggling all these jobs – if I had a raise every year that I was there, I wouldn’t be in this situation. I would think that I could cut back. I’ve always had two jobs to help, to make it. But just lately … I take two steps forward and I get pushed three steps back.” District 41 member Renee Wilkins, who was featured in the Nov. 17 News & Observer article, “Four years, one raise: Wake clerk works four jobs to support her sons”

“It’s embarrassing. We have people who are literally on food stamps and child care subsidies. They can’t make it on their government job, on their salary.” SEANC Executive Director Dana Cope, pointing out the plight of state workers in the article featuring Wilkins

“The State Health Plan is having the same problems that have been cited for (Obamacare), and there’s been no suggestion that there be legislative committee meetings on the problems ... Penalties should not be exercised against employees who tried to get through and couldn’t get through.”

“It should have been a very simple process. I should have gone online, been done with it in 20 minutes. And I can’t do it.”

SEANC health care expert Chuck Stone in the Oct. 24 News & Observer story, “State employees facing delays in getting health insurance”

District 39 member Mary O’Neill in the Oct. 31 WRAL-TV story, “Problems affect online enrollment for State Health Plan”

“Since the State Health Plan is doing so well, why are we making state employees go through all these punitive measures? What state employees were hoping for is that some of the funds would be reinvested into the health plans and the premiums would become lower. ” Communications Director Toni Davis said in the above article, referring to the fact that premiums increased even though the State Health Plan now has an $800 million surplus.

“It has really been a nightmare.” District 59 Chairwoman Kathy Merritt in the Oct. 29 News & Observer story, “State Health Plan pushes for changes to address enrollment problems”


Snow means state employees work all night to keep our roads safe. Thank you . @NCDOT .@NCSHP @NCEmergency employees #ncgov #wemakeNCwork

SEANC’s official Twitter feed (@seanc2008) on Nov. 12 with the first winter weather event of the season. The Reporter • December 2013


Periodical Postage PAID Raleigh, NC 1621 Midtown Place Raleigh, NC 27609

SEANC to Host Forums on Employee Rights by

Toni Davis

SEANC Director of Communications

What once was the State Personnel Act (SPA) is now called the State Human Resources Act (SHRA) and SEANC is planning forums around the state to help members understand the changes associated with their worker rights. Come learn about your Top 10 workplace rights, how they have changed and why you should care. The State Human Resources Act (formerly the State Personnel Act) is likely to be a topic when the General Assembly reconvenes in May. Gov. Pat McCrory and his staff have already said in media reports that they “wished they could’ve changed more” of the act last session. The act is the single most important piece of legislation protecting state employment in North Carolina and contains all the provisions that keep

SHRA Forum Dates • Charlotte – Jan. 15 Central Piedmont Community College Cato Campus Auditorium • Morganton – Jan. 21 Western Piedmont Community College Auditorium • Raleigh – Jan. 28 N.C. State University McKimmon Center • Wilmington – Feb. 5 New Hanover Cooperative Extension • Goldsboro – Feb. 6 Wayne Community College Moffatt Auditorium

politics out of public service – such as employee rights, grievance procedures and reduction-in-force rights. This year, SEANC maintained the integrity of the State Personnel Act by having 36 troubling provisions, including due process and patronage concerns, removed from the SHRA.

To continue to ward off harmful changes in the future, state employees first need to understand their rights. SEANC will offer forums around the state in January and February to educate members with the knowledge needed for informed state employment. The forums will feature presentations from SEANC experts Executive Director Dana Cope, General Counsel Tom Harris and Legislative Affairs Director Ardis Watkins — all veterans of the N.C. Department of Labor who are well versed in labor laws — as well as a town hall where they will field questions from members. Forums are planned for Charlotte, Raleigh, Morganton, Wilmington and Goldsboro and are open to all SEANC members free of charge. Each forum will be held from 5:30 to 7:30 p.m. Contact SEANC’s Central Office for more information.

December 2013 Reporter final