Opinion ID: 2570481
Heading Depth: 1
Heading Rank: 6

Heading: The District's Contentions

Text: The District counters, asserting: (1) Resolution involves the interpretation and application of the PA, (2) the parties have agreed to submit such a grievance to arbitration, and (3) the trial court does not have jurisdiction. According to the District: (1) The cafeteria plan is not a contract with professional employees, (2) the cafeteria plan flows from the District's obligations under the PA, (3) the District was given full discretion to set up the cafeteria plan (which merely states the employees' options with respect to their fringe benefit package), (4) the health insurance programs set out in the cafeteria plan are the result of a contract between the District and BCBS, (5) the Rider is a supplement to the contract between the District and BCBS, (6) the cafeteria plan does not govern entitlement to the divisible surplusthe Rider does, (7) if the Rider entitles the District to the surplusthen the District is only required to pay the surplus to its employees if it has agreed to do so by contract, and, thus, (8) if the professional employees have any right to the surplus, that right flows from the PA. The District argues the Rider only provides that the portion of the divisible surplus that is paid in cash and is in excess of the Contract Holder's share of the premiums shall be applied for the sole benefit of the insureds. Therefore, the District says it had the right to retain the portion of the divisible surplus representing the premiums it contributed. The District contends it had no obligation to pay out any of the 1993-94, 1994-95 divisible surplus because the surplus belonged to the District. The District reasons its distribution of part of the surplus for both years to the insureds was purely discretionary. For the 1993-1994 policy year, the District paid $2,739,535.28 in health insurance premiums. The District remitted an additional $1,789,243.54 in salary deductions for employees who opted for coverage other than the single low-option plan. In 1994, the District received a $731,046.47 divisible surplus. According to the District, its share of the premiums was $2,739,535.28; thus, the amount of the divisible surplus in excess of the Contract Holder's share was zero. For 1994-1995, the District received a $1,007,678 divisible surplus. It paid $2,937,289.15 for premiums and an additional $1,577,382.65 in salary deductions (again for covered employees choosing a plan other than a single low-option health plan). Again, the divisible surplus in excess of the Contract Holder's share was zero.