3/16/21 PSP Update From KP and PSP FAQs From the Alliance

The communication below was sent via email from Frank Hurtarte Senior Vice President of Human Resources regarding the PSP. 

March 16, 2021 

Dear colleague, 

We have recently had several concerns raised about the accuracy of individual attendance payouts to Alliance of Health Care Union employees under the Performance Sharing Program. The concerns brought forward are specific to the “individual attendance payout amounts” and not the PSP base payout. We want you to know that Kaiser Permanente Southern California Region is performing a review of the last-minute sick hours to ensure accuracy of the individual attendance payout amount. 

We have informed the Alliance Union leadership we are reviewing last minute sick hours as we know this impacts the individual attendance payout concerns brought to our attention. Once we understand the impact, we will follow up with the respective Alliance union leaders to keep them informed of this situation and our progress in resolving it. 

We take this situation very seriously. We recognize the achievements attained in 2020 by you and your co-workers in responding to the extraordinary challenges of the COVID-19 pandemic. Your dedication, hard work, and professionalism were instrumental in helping Kaiser Permanente meet the health needs of our member’s and communities during that period’s unprecedented public health emergency. 

We want you to know that we are urgently working to review these concerns and we will have an update for you on a solution in the very near future. In the meantime, if you have questions regarding your payout, please submit them to us at [email protected]. We will get back to you with a response. 

Thank you for your understanding. 

Sincerely,

Frank Hurtarte

Senior Vice President, Human Resources

Kaiser Permanente Southern California, Health Plan and Hospitals

FAQs: Southern California Performance Sharing Plan (PSP) for Alliance Union members


There have been a lot of communications about this year’s PSP from different organizations andKP, often using different terminology and many union members are asking questions.

How did Kaiser Permanente calculate our PSP bonus this year?

● In every National Agreement, the Alliance unions negotiate with KP for a PerformanceSharing Plan (PSP) to reflect union members’ contribution to KP’s high performance. This year, KP used the same methodology as in past years to calculate the payout owed to union members under our National Agreement.
● PSP plan payout rules differ between regions within Kaiser Permanente – in SCAL, thePSP payout is calculated based on success in meeting bargained PSP goals and financial performance by the region overall. These terms establish the plan performance.
● This year, Alliance unions reached agreement with KP that in view of the COVIDpandemic, the plan would pay out at least 100%, even if plan performance fell below 100%. Under the Alliance 2020 PSP goals and SCAL financial performance, all SCALservice areas are receiving payouts over 100%.

Why do personal PSP payout numbers vary, even within service areas?
● There are two ways actual PSP numbers are adjusted for Alliance members:
○ Employees with 1,800 hours or more are eligible to receive the full amount.Employees with less than 1,800 hours will receive a pro-rated amount. This happens every year and the methodology hasn’t changed.
○ As in past years, the Alliance has an individual attendance goal based on lastminute sick calls. Those individuals who meet the target of 3 last minute sickcalls are at “target”. Employees with more last minute sick calls have their PSP payout reduced, and employees performing better (2 or less) have their PSPpayout increased.

Based on these two factors, employees may receive more or less than the general PSP number for their service area. The same adjustments occurred in past years.

How was Alliance attendance affected by COVID?
● The Alliance PSP attendance bonus has focused on last minute sick calls, which are themost difficult for our co-workers and for patient care. We are pleased to report that in general Alliance members significantly improved their attendance in 2020. Last minute sick calls are down across the board. This is a great tribute to the bravery and dedication
Alliance union members have shown in meeting the needs of our patients in the middle of a pandemic.
● This is strong evidence for the effectiveness of this program, and all the other work Alliance unions do to promote attendance. We continue to look for opportunities to improve our attendance program, because excessive absenteeism causes problems for our co-workers, our patients and KP.

I have been hearing about a “hero bonus.” I’ve heard some employees say they were expecting two bonuses this year. Is there a special COVID bonus? Is there an additional bonus on top of the PSP?
● No, there is only one bonus this year, whether you are in the Alliance or in other unions or unrepresented.
● The term “Hero Bonus” has been used by other unions (not the Alliance) to refer to the agreement reached with KP this year to pay out PSP at least at 100%. It is not an additional bonus. It is just a different name for the agreement our unions all made with KP to guarantee at least 100% payout. To avoid confusion, the Alliance chose to refer to the special arrangements this year as a guaranteed PSP payout.

What’s different about PSP payouts this year?
● Starting in the spring of last year, the Alliance approached KP with concerns about the impact of the COVID pandemic on potential PSP payouts. Both the Alliance and the Coalition made proposals to KP which were similar although not identical.
● In response, KP announced in December special rules for bonus payments this year, to apply to all KP employees. KP’s December announcement affected Coalition members, Alliance members, members of non-partnership unions, and unrepresented non-union employees. Each group was impacted somewhat differently based on their existing bonus systems.

Did 2020’s special PSP guarantee result in extra money for Alliance members this year?
● Not in Southern California. However, Alliance members in Georgia, Washington state, and Hawaii benefited from the special guarantee because those regions did not meet the “financial gate” – the required financial performance to support a full PSP payout. Without the special payout arrangements this year, these members would have received much smaller bonuses.
● The reason that it did not increase payments in Southern California is that all Alliance members in Southern California were already entitled to more than 100% PSP payout under the normal rules.

Why are Alliance payout percentages higher than Coalition payment percentages in Southern California this year?
● Across SCAL, Alliance payout percentages are higher than Coalition payout percentages because of the different terms of the respective collective bargaining
agreements. Because our payouts are adjusted individually based on last minute sick call offs, there is variation between Alliance members based on their individual performance.
● While many terms of the PSP plans are common across different unions (and in some areas with plans for unrepresented employees also), each plan is governed by bargained PSP goals and by the terms of the respective collective bargaining agreements.
● In 2018 negotiations, the Alliance made changes in our PSP language. These included a minimum guarantee formula for regions which do not meet the financial gate. We maintained the option for regions to bargain individual attendance goals or collective attendance goals, depending on regional PSP negotiations. Alliance members in SCAL were able to retain the individual PSP attendance goals which have been a popular part of the SCAL program for years.
● In 2019 negotiations, the Coalition did not bargain a minimum guarantee formula. The Coalition also agreed to replace the individual attendance program with a collective attendance goal of 25% of the PSP formula. Their formula includes 10% for reaching an agreement on an attendance program, and 15% for meeting certain collective attendance goals. As a collective attendance goal, the payout occurs when the group as a whole improves attendance across the region.
● Every negotiation involves tradeoffs and it is difficult to compare by “cherry-picking” the best provisions out of each contract. In most respects, the Alliance and Coalition agreements are the same.
○ In some cases, we bargained improvements in 2018 (for example, in educational trust funding and contract specialist numbers) which were subsequently adopted in Coalition 2019 negotiations.
○ In other cases, they are different. For example in SCAL, the Coalition retained $5 active medical co-pays, whereas the Alliance made improvements in dental coverage which the Coalition did not. The Alliance also made health insurance improvements for members previously in flex plans, and other gains. That’s how bargaining works – each bargaining team and labor organization determines its priorities, and bargains with the employer to meet those priorities.
● We believe that our PSP provisions in the Alliance agreement are better for our members than the PSP provisions in the Coalition agreement. In this case, the PSP formula bargained by the Alliance worked out better than the PSP formula bargained by the Coalition, but it could be different at other times or in different regions or if attendance performance was different.
● It’s up to the members of each union to determine the overall value of their contract, and we are proud of our Alliance national agreement and our success in maintaining and improving industry-leading compensation. In general, all workers benefit when unions bargain good contract provisions, because it raises the bar for everyone.
● We will be working hard this year in our Alliance national bargaining to continue to maintain and improve our industry-leading wages and benefits.

I have heard the Coalition is disputing their PSP payout amounts.
● It’s up to each union to determine whether they believe their contract is being followed and to take action to enforce their contract if they believe it is not being followed.
● We understand the Coalition objects to the way KP has implemented the attendance provisions they bargained in 2019, which resulted in a 15% reduction in their PSP payments. Those provisions don’t apply to us and we weren’t a part of those negotiations. We are not in position to address how another labor organization’s contract is interpreted and applied to their members.
● Our job is to represent our members and ensure our contract is followed, and to take action if we believe our contract is not followed. When we believe our contract is not followed in PSP or any other area, we work to enforce our contract. In fact, we have a number of pending disputes to enforce our national agreement in various areas including PSP. We will continue to review KP’s PSP methodology and calculations, and raise any issues through our contractual processes.

How does PSP work if I transferred in the middle of the year between KFH and SCPMG or between locations?
● PSP in SCAL has always varied between KFH and SCPMG (which can have different goals), and between service areas based on performance toward the goals. KP has established systems for dealing with employees who transfer when it comes to PSP, and our understanding is that this system has not changed. Your payout is based on how and where you were coded in the payroll system as of 12/31/20. Our understanding is that a temporary redeployment should not change how you are coded in the payroll system, however a permanent transfer would change your payment to the amount of your new payroll location/employer.