School boards ask Legislature to change arbitration rules, add factors as health premiums surge

Witnesses before the Senate Education Committee on April 11 urged changes to the statewide process for bargaining school employee health benefits and to the arbitration framework that resolves impasses.

"Health insurance is expensive," said Sue Seglowski, executive director of the Vermont School Boards Association, testifying that rising benefit costs are reducing funds available for instruction and student supports. Seglowski described the Commission on Public School Employee Health Benefits — created by 2018 legislation — as a 10‑member body (five appointees from the Vermont School Boards Association and five representing employees) that negotiates premium shares, out‑of‑pocket arrangements and whether districts provide health reimbursement arrangements (HRAs).

Seglowski told senators the commission collects data in the fall, and the next bargaining round is scheduled to begin in April 2026. If the commission cannot reach agreement by Aug. 1, a fact finder supplies a report and, failing settlement, the parties submit last best offers to an arbitration panel. "In both past rounds, the arbitrators picked the employee's offer," Seglowski said, and she proposed changes she said would make outcomes more balanced.

Rebecca McBroom, who identified herself as general counsel for Vermont VA. LEA and said she has handled the arbitration process since statewide bargaining began, described the arbitration panel's constrained authority. Quoting the arbitration decision in the most recent round, she cited the statute that requires the arbitrators to "select one of the last best offers without amendment," and she said that limitation prevents panels from combining parts of competing offers even when elements of both are persuasive.

Witnesses recommended several reforms: allow arbitrators to consider how school plans compare to coverage available through Vermont Health Connect and to the pace of cost growth relative to the state's economy; permit an arbitrator to craft a compromise drawn from parts of both parties' last best offers rather than choosing one package whole; consider a single statewide administrator for HRAs to reduce overhead; add neutral members to the commission; and explore a phased cap on benefit value.

Speakers provided data to underscore urgency. Seglowski said Vermont school employees collectively pay $60 million a year in premiums. She testified that next year licensed educators and support staff will pay about $8,200 in premiums (a 12% increase from $7,300), and that premium increases have totaled roughly 30% over two years. She also described relative pay impacts: licensed educators with a minimum average salary of about $46,000 would spend roughly 16% of their pay on premiums; paraprofessionals with an average minimum salary around $27,000 would spend about 30% of pay on premiums.

Rebecca McBroom described the arbitration process in practice: multi‑day fact‑finding hearings with witnesses and a three‑member arbitration panel; the panel applies statutory factors and then must select one party's last best offer in full. McBroom said the process is thorough, but panel constraints have repeatedly led to employee offers being selected in recent rounds.

Some senators questioned whether the Senate Education Committee is the appropriate venue for changes that touch collective bargaining and state finance. Committee members said the committee had previously considered the statewide bargaining law, and several asked for additional testimony from teachers, unions and other stakeholders.

The committee did not adopt legislation or take a vote. Witnesses offered to provide draft statutory language and supporting documents; committee members said staff would circulate materials and consider referrals to relevant committees.