Prepared by and distributed on behalf of the Board of Directors of GSA Carleton Inc.
The GSA Carleton Inc. Board of Directors has continued its efforts to address the decision by the Carleton University Students’ Association and CUSA Inc. to attempt to unilaterally terminate two agreements regarding the Health, Dental, and Accident Plan with GSA Carleton Inc. at the end of July 2012. Despite its best efforts, the Board has not been able to reach a satisfactory resolution and the CUSA executive continues to refuse to meet under the terms of the Joint Oversight Committee for the plan – a committee established in a 2000 agreement between the two parties.
The Board has made the very difficult decision to serve CUSA with legal action. While the legal action progresses, there may be limitations as to what the Board can publicly disclose. However, the Board believes it is important for members of the GSA to understand why this action is being undertaken.
There are two primary reasons the Board is undertaking legal action. First, the Board is asking the court to rule on the legality of CUSA’s attempts to cancel two joint health plan agreements with the GSA. For over a decade CUSA and the GSA have had a joint plan that could be dissolved through mutual consent or a referendum of either Associations’ membership. These means of termination were established to ensure stability of the plan for students and to avoid sudden disruptions to a crucial service for our respective memberships. In July 2012, CUSA President Alex Golovko and Vice-President Finance Michael DeLuca moved a motion at CUSA Council to redefine ‘referendum’ such that a ‘referendum’ purportedly became a vote of the three CUSA executives who are Trustees of CUSA Inc. The Board of GSA Carleton Inc. strongly believes that, in addition to these actions being profoundly undemocratic, changing By-Laws for the sole purpose of breaking contracts is not legally defensible. CUSA and the GSA also have many other agreements regarding finances and services to our memberships that need to be respected.
The Board is also taking legal action to block attempts by the CUSA executive to unilaterally liquidate the health plan reserve funds. The Board asserts that these funds are jointly owned and must be used in a manner consistent with the purpose for which they were accumulated.
The joint health plan was in a strong financial position. As a not-for-profit plan, it used a ‘refund’ (or ‘retention’) accounting method. This method means that after student health claims and administrative fees are paid out, any surplus accrues in a reserve account. Under many for-profit plans, these funds simply result in additional profit for the broker and/or insurer. The joint plan’s reserve funds can be applied against future unexpected losses (such as in the event of a pandemic), and allowed the GSA and CUSA to improve the plan’s benefits without risking its stability (as was done for 2012-2013). The reserve also lowers risk to the insurer and thus facilitated better rates for GSA and CUSA members. As has been stated in a previous Membership Advisory, the Board of Directors for GSA Carleton Inc. will utilise any and all lawful means to prevent CUSA from claiming exclusive ownership of this reserve fund.
For additional information, please read the two previous GSA Membership Advisories (below) regarding the health plan. Questions can be directed to GSA President Kelly Black at email@example.com.