State employee health insurance premiums

Like roughly 80% of Massachusetts workers, public employees receive health insurance as part of their compensation.   The issue of how much active employees should contribute to the cost of that insurance has been controversial in every recent budget season.    Since the cost of public employee health insurance is just under $1 billion, the employee share is a substantial question — a 5% shift has a $50 million budget impact comparable to elimination of the Quinn Bill.

The table below summarizes the recent proposals.

 Employee Share 15%Employee Share 20%Employee Share 25%Employee Share 30%
Fiscal 2009 EnactedIf hired before June 30, 2003If hired after June 30, 2003
Governor's Fiscal 2010If salary under $30,000If Salary $30,000 to $50,000If salary over $50,000
House Ways and Means Committee's Fiscal 2010All
House Final Action for Fiscal 2010If hired before June 30, 2009If hired after June 30, 2009

Note that retiree shares have been left undisturbed in all proposals at 10% for persons retired before July 1, 1994 and 15% for those retiring thereafter.

Raising the employee health insurance share amounts to a pay cut.  An employee at the 15% share level plan currently pays between $147 and $339 per month for a family plan (depending on the plan that they choose).   So, an increase to 20% would work out to a pay cut of roughly $50 to $100 per month.  An increase to 30% could be a paycut of over $300 per month. If the employee is at the lower end of the income range — say a legislative aide taking home $2000 per month — this could be a 15% cut in take-home pay.  (Of course, that employee could ease the pain by shifting to a less expensive health plan.)

It does appear that state workers are paying less than the median among Massachusetts workers, which appears to be in the area of 25%.  The Governor cites, in his policy brief on the GIC health insurance shares, a similar finding from a Kaiser family foundation survey that nationally workers contribute on average 27% for family coverage (but only 16% for individual coverage).   Of course, some employers do not offer health insurance at all and many offer plans which are more limited than those offered by the Commonwealth, which most perceive to be very solid plans.

In the last budget season (FY2009), I opposed a increase in health insurance premium shares for public employees; in the Spring of 2008, it did not seem fair to be calling for a pay cut for public employees.  In the most recent session with the huge economic downturn, I modified my position.  I declined to co-sponsor amendments that would have blocked the House Ways and Means proposal to raise the share to 30%.  I recognized that proposal as a bargaining position on what is always a contentious issue, but felt that some modification of the employee share was appropriate.   In internal informal discussions, I advocated for a tiering approach that used a sliding scale.  The Governor’s rigid tiers had odd edge effects (one wouldn’t want to get a raise from just under $50,000 to just over $50,000), but the idea was right — to protect the lowest income workers from rising health care costs.

I heard from dozens of public employees in my district opposing any change.  I am completely respectful of their contributions and the good work that they do,  but felt that in this year of widespread job losses, dramatically falling state revenues, tax increase proposals and service cuts, it was fair to adjust the share.   Bottom line:  I supported the compromise increase outlined in the table above.   I note that I personally, as a compensated state legislator, will experience the same premium increase that other employees will experience as a result of the compromise non-tiered approach that the House adopted.

Of course, the Senate may need to go even further with premium increases as they attempt to balance the budget with even less money to work with.

Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.

6 replies on “State employee health insurance premiums”

  1. I understand the difficult position you are in with the vote to increase state employees health insurance contributions. Even though I am grateful to continue to be employed by the Commonwealth, the fact is that salaries are well below market for the professional services rendered–with the understanding that job security, health and pension benefits will in some measure make up for the long term salary short-fall.

    Given this economic climate, with the massive budget cuts to DMH, DMR, and state subcontract services to the indigent and needy in our society, the remaining employees in the human service sector have to pick up clients served previously by other agencies–often increasing our work loads, and our stress loads, without adequate head count staffing patterns, or financial compensation.

    In fact, we have had no contract for a 1 year period. After a collective bargaining process in good faith, the 1% increase for this year has been cancelled.

    Now on top of this, your vote puts already underpaid, overworked, and over stressed remaining state employes in the position of a pay cut to cover health insurance costs.

    Where is the equity and fairness in your position? Why balance the budget on the backs of state workers?

  2. As an employee of the Commonwealth, I’d like to thank Will for supporting the compromise. While it will result in a pay cut for me, I understand that we are facing unprecedented budgetary constraints, which will result in cutting some services. Additionally, as we see with many businesses (non-profit and profit alike), there are significant lay-offs or salary reductions, across the board. I think we are all going to suffer some pain with the current economic problems, at least the compromise increase will not be as much as a hardship as the original proposal and I appreciate Will’s support.

  3. As a public school teacher who will be retiring after 36 years in 2010, I worry that the cost of my health insurance will continue to go up, thereby swallowing the miserly COLA increase of $260 per year granted us.
    Furthermore, I have grave reservations about your proposals. One comment is to shift to a cheaper health care program, but for those who are currently under medical care, that is not always an option. Or, as I have discovered, most companies will not cover a majority of services for two years, leaving those, like me, who need medicines and services for chronic problems uncovered.
    A third problem I have is that the governor’s proposal is taking away the right to negotiate with authorities. As an active, long-time Board of Directors member of my local, and a delegate to the MTA and NEA conventions, I am opposed to any legislature that even hints of union “busting”.
    I had a discussion with you about the GIC, and I still have some reservations about that. I have had the experience of promises made (like not becoming a monopoly) and promises quickly broken when it became expedient.
    Thank you for sharing your thoughts.
    Sincerely,
    Cheryl Ann Welch

  4. As a public school teacher who will be retiring after 36 years in 2010, I worry that the cost of my health insurance will continue to go up, thereby swallowing the miserly COLA increase of $260 per year granted us.
    Furthermore, I have grave reservations about your proposals. One comment is to shift to a cheaper health care program, but for those who are currently under medical care, that is not always an option. Or, as I have discovered, most companies will not cover a majority of services for two years, leaving those, like me, who need medicines and services for chronic problems uncovered.
    A third problem I have is that the governor’s proposal is taking away the right to negotiate with authorities. As an active, long-time Board of Directors member of my local, and a delegate to the MTA and NEA conventions, I am opposed to any legislature that even hints of union “busting”.
    I had a discussion with you about the GIC, and I still have some reservations about that. I have had the experience of promises made (like not becoming a monopoly) and promises quickly broken when it became expedient.
    Thank you for sharing your thoughts.
    Sincerely,
    Cheryl Ann Welch

  5. 1) Please vote against the governor’s proposed doubling of state employees’ health insurance contribution. I’m a part time faculty member at UMass Boston. I spend a lot of time on one-on-one contact with students, which is what UMB advertises (see current subway ads) and delivers. We signed a contract which includes no raise in the first year, and small raises thereafter which are unlikely to be funded. GIC premiums and especially copayments are also about to go up. To double my health insurance costs at the same time is a significant pay cut, and the opposite of moving toward affordable healthcare.

    2) Obviously as a state employee I have a bias toward increasing revenues. But I’m also self-employed in my other half-time. I’m still in favor of increased revenues, because we have to fund services. I’d rather see an increase in gas taxes, dividend tax, or targeted sales tax (e.g. alcohol) than over-all sales tax. Especially, use gas tax to fund the T. Otherwise (as in health insurance), we’re going against our country’s new goals, this time in energy use.

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