The President’s column typically covers aspects of recent orchestra negotiations. While many were rightfully concerned with negotiations last fall, few were prepared for what unfolded in St. Louis. I would like to offer some thoughts on one effect of the St. Louis melee.
On March 13 I had the distinct pleasure to join more than thirty musicians from ten ICSOM orchestras who traveled to perform with our SLSO colleagues in order to thank the St. Louis community for its support. Everyone I spoke with that day remarked how this was a concert for the ages and a definite career highlight. The enthusiasm and emotion demonstrated by musicians and audience alike was nothing short of electrifying. ArtsJournal’s Drew McManus wrote three excellent columns about this unique performance. They can be found online at: www.artsjournal.com/adaptistration/archives20050301.shtml.
The extraordinary events of March 13 serve as resounding reminders of the collective power musicians have when they stand together. National and local press focused on how significant it was that so many orchestras felt it was crucial to support their fellow SLSO colleagues. This act of solidarity is a prime example of why ICSOM is needed today just as forty years ago.
Imagine for a moment the power and influence possible if our managements, boards, and communities come to expect this type of solidarity when such collective action from ICSOM is warranted! We have the means, if our collective energies are skillfully harnessed, to cause managers and boards to think twice before rolling back wages, working conditions, and, most importantly, the artistic integrity of our orchestras.
Violist Jennifer Arnold will join the Oregon Symphony Orchestra, becoming the first Sphinx alumna to hold a full-time position with a major US orchestra. Jennifer was a semi-finalist in the 2001 and 2003 Sphinx Competitions. As a Sphinx alumna, Jennifer performed with the Sphinx Symphony as well as with the Sphinx Chamber Orchestra at Carnegie Hall. She is a graduate of the Cleveland Institute of Music.
For further information regarding the Sphinx Organization, go online to www.sphinxmusic.org or write the Sphinx Organization at 400 Renaissance Center, Suite 2120, Detroit MI, 48243.
The Sphinx Organization and the annual Sphinx Competition, for which ICSOM provides support, are about encouraging, developing and recognizing classical musical talent in the black and the Latino communities and among all youths. Recent initiatives include a preparatory music institute with Wayne State University (home of the ICSOM Conductor Evaluation Program) as well as a commission by Dr. Adolphus Hailstork.
Health Insurance Report
The ICSOM Governing Board started a comprehensive study in 2003 to investigate a national healthcare plan for ICSOM and other full-time AFM orchestras. Representatives from the Mercer Human Resource Consulting Group out of Boston and Washington D.C. were engaged to provide assistance.
The goal was to explore national healthcare options that, according to preliminary research by the Mercer Group, might offer savings as high as 10%. The largest savings would be obtained through a self-insured plan covering all ICSOM orchestras, which would eliminate or reduce claim margins, premium taxes, risk charges, and administration charges. A fully insured plan through a national carrier would offer somewhat smaller savings.
On May 24, 2004, members of the ICSOM Governing Board, Major Managers’ Healthcare Taskforce, ROPA representatives, and members of the AFM International Executive Board met in Chicago. After a great deal of research and discussion, our joint conclusion was that there are currently simply too many obstacles to warrant further action. Some of the issues include:
- Insurance carriers are hesitant to bid competitively for national groups that cannot be clearly identified. This is relevant because our health insurance benefits are negotiated locally, unlike the health benefits for some national groups such as teachers and teamsters unions.
- Insurance costs vary widely on a regional basis. Orchestras in the south, for example, enjoy lower overall costs than those in the northeast or in the west. Because of these cost differences, it would be likely that orchestras with already low rates will self-select out of the group, leaving participating orchestras with higher average costs. Such “cherry picking” would effectively negate the benefit of spreading risk to all orchestras.
- One plan design we examined would have covered, in addition to musicians, orchestra staff not employed under collective bargaining agreements. States are allowed to regulate healthcare plans covering employees of unrelated employers, known as Multiple Employer Welfare Arrangements (MEWAs). Unfortunately, state regulations governing self-funded MEWAs vary by including separate state-mandated benefits, having different cash reserve and filing requirements, and even disallowing coverage in some states.
- Collectively bargained healthcare plans can avoid these MEWA laws if at least 75% of all participants are covered by the collective bargaining agreements establishing the plan (among other requirements). A comprehensive survey of ICSOM and ROPA orchestras completed last summer showed that we fell short of the 75% requirement due to the high number of staff personnel in our orchestras. Faced with this result at the meeting last May, we suggested that managers encourage their staffs to unionize in order to reduce health insurance costs. The managers were not enthusiastic about this “solution!”
Given that we could not meet the 75% test, we faced four options:
- Institute a fully insured national plan, losing the advantages of pricing flexibility and increased savings associated with self-funded plans.
- Try to meet state MEWA laws, which vary widely from state–to– state, again reducing savings and flexibility.
- Petition the Department of Labor for a federal government exemption. Given the outcome of the national elections last November, it is highly unlikely that our request would be granted.
- Create a musician-only national plan. Any savings that might be realized from a musician-only plan could well be negated by higher premiums for the staff personnel, whose group size would shrink considerably without the musicians.
Since none of the above options was deemed practical, we have decided to postpone further study of national healthcare coverage for our orchestras until a later time.
On behalf of the Governing Board, I would like to express my appreciation to the many AFM officers, staff and counsel who worked on this project, as well as the Major Managers’ Healthcare Taskforce. Special recognition goes to ICSOM Counsel Leonard Leibowitz, Paul Desrosiers and his team from the Mercer Human Resource Consulting Group, and attorney Susan Martin. Finally, thank you all for your patience as we researched the many options. Rest assured that no stone was left unturned! Although we were not able to establish a national healthcare plan, we better understand the many challenges involved. We look forward to a time when circumstances are more favorable.