Fair Health Insurance Costs

DB

I posted this under Benefits and had no replies. Please help!

We have 4 union contracts that specify employees hired before a certain date pay NOTHING for family coverage. Employees hired after that date pay $100 per month for a $925 policy. No one pays anything for single coverage. The City cannot afford this any longer and has to make a change. All the contracts are coming up for renewal soon.

Option 1 would require all employees to pay a percentage of their salary - starting at 1% this year and moving up to 6% over 3 years. Everyone would pay regardless of single or family coverage. The percentage increases would occur at the same time the COLA are received.

Option 2 would require all employees to pay a percentage of the premium - probably something in the 10-15% range but employees would only pay based on the type of coverage they have. Premium increases occur at the same time as the COLA.

Option 3 would be to decrease the benefits (our medical is cream of the crop - the company won't even sell it anymore). Unfortunately, many employees have never worked anywhere else, don't know how good it is and don't believe us when we tell them.

My boss likes Option 1 but I've never seen it implemented before. It sounds cumbersome to me. Plus, a highly paid employee with single coverage could end up paying more than a lower paid employee with family coverage.

Please give me your input.

rad

Good luck getting the unions to agree to any of them.

Betty I_O

Option 2 is the way we curently handle our insurances, but we are non-union. RAD's right--you'll have an uphill battle with your union.

Option 1 seems cumbersome (but we have an affiliated organization that uses a proration of the number of hours worked as the basis for the medical/dental cost, so I've seen stranger things); Option 3 could get your costs down significantly if you had a snowball's chance in h--- to get the union to buy that one.

Balloonman

Good luck you are going to need it. Does your contract specify the type of health insurance? If not and they are not willing to bend, just replace the cream of the crop with a more standard plan with co-pays and deductibles and tell them to go fcuk themselves. You will need some additional staff to hire possible replacement workers. Geez why do I never get to be on the bargaining/negotiating committee! :-?
Find a standard plan or what you are willing to live with, and find the weakest most pathetic coverage and use it as your threat.
My $0.02 worth.
DJ The Balloonman

Whatever

Did option three on our last contract. It was not easy for the reasons you outline (plus the fact our shop steward is not a shining light). Union originally didn't want to negotiate the issue. However, while we are always willing to negotiate in good faith, we were also willing take a strike. Benefits decreased.

Parabeagle

I feel for you. Many union co.'s don't realize just how good they have it until they have to join the "real world" and find out just how bad the health care crisis is. Enough whining, though. We are implementing Option 2 beginning our next plan year, and all our employees understand the rationale behind it -- it's just too expensive if we want to keep the same level of coverage. But, again, we are also nonunion so we didn't have to bargain.

TN HR

I was reading an article on this subject last night in Kiplinger's and had a novel idea:

What if we assign employee contributions to premiums based on risk and experience?

I expect to get the electronic equivalent of a Calloway Great Big Bertha to the face over this from the Forumites, so bring it on!

Gene

Hunter1

Unfortunately, IL followed WI in its 'enlightened' approach to public sector bargaining and you now have some form of mediation/arbitration, right? Good Luck! Public employers in WI have been chipping away at health costs for the last several years, but no one has made substantial progress. As I recall, Greenfield, WI tried the % of income approach a couple of years back but wasn't successful. Probably the best approach is some combination of #2 & #3: Have employees pay a % of premium and decrease the benefits, or give employees the ability to keep their current level of benefits, but pay the actuarial cost difference between that plan and a lesser benefit plan.

I don't think we're ready yet for consumer driven health. One other thing: If you are still doing actual COLAs, get rid of them!

Public sector employees need to be dragged kicking and screaming into the real world.

Sunny

We have a union plant and use option 2. In addition, our contract states: "In the event insurance cost rises above the states' CPI medical index, the parties agree to meet and discuss the problem and may change to a carreir who will provide a comparable plan at a reduced cost by mutual agreement."

It will be difficult and you may have to risk a strike, but you need to scale back your plan and make the employees pay a % of the premium. Around here an 80/20 split is fairly standard (of the premium and the increases.)

Good luck.

lnelson

Option have all ee's pays 15% of coverage and you lower your benefit to a more cost effective plan with higher copay and/or deductible. If family coverage costs 995./mth they would pay aprox. 150./mth that is pretty reasonable.
But I am not in a union atmosphere. Good Luck!

hrbanker

All of the schools in our area are going through this right now. My husband's school brought in an insurance broker/speaker to explain the different types of coverage including how PPO's and HMO's save money by using provider networks. The school then started their bargaining with putting a limit on what they will pay for coverage. They gave the employees the option of changing to a less expensive plan or paying the premium over $1000.

Their union voted to keep the expensive plan, pay the difference, and accepted a pay increase that just covered the insurance.

Several other schools have come to similar arragements, giving back most of their salary increase in insurance premiums.

Option #2 is probably going to be the option your employees will approve.
Good luck!

irenesmsaclaims

TN HR, please look at the thread in "Benefits" called "Charging Smokers More"!

cebudragonlady

Try a spreadsheet with all three options, and present it to the union to make a choice. Some of the other posters are certainly aware of the big supermarket strike over health care here in Southern California - escalating health care costs are the big labor issue of this decade.

Health insurance costs are irrational - based on the age of the employee in a lot of cases. For example , I am 57 and my stay-at-home spouse is 48 - and I am the only one working : so I currently pay a lot more than if our roles were reversed and he was the one working. It is crazy. Younger age doesn't aways mean better health.

Chari

slogan

As the Benefits/Compensation Manager for our county, I agree with the spreedsheet idea to illustrate to the whinnning union members just how good they have it. But to keep it good, the are going to have to contribute or change plans. I have just finished a small report comparing plans so I can show our commissioners just how good we have it, but that we need to make changes. I would be glad to forward it to you. My address is [email]slogan@sjcounty.net[/email].

Part of why I did this was because our illustrious Governor signed back into law permission for government entities within the state to unionize. Currently we have no unions in our county employees, but there are runblings. It just amazes me that people who are on the taxpayers payroll think the world owes them. The nature of working for a gov't entity is not to make a ton of money. If they want that, go back to the private sector. We just covered come oif these issues in my CEBS course so this is interesting reading!

Pork

DB: Go self insured, hire a medical nurse to administer the claims, and have employee cost sharing in the premium $12.00 a week for single coverage & $41.50 for family coverage. Budget your overall cost for the group based on the last 5 years history, then operate within your cost and make payments on time and you'll realize a medical cost savings; you could even insist the Union administer the health cost and you could pay the ee the savings and let the ee pay the union, thus getting the city out of the medical coverage business & the constant headaches with ee complaints with the cost.

In-house administered medical coverage plan will save you money.

PORK

blw

We currently use Option 1 - sort of. The employees pay a percentage of salary for their own coverage, but pay the full premium for dependent coverage. We are a non-profit and cannot pay for dependent coverage.

Why not try the percentage of salary for employee coverage and if someone has dependent coverage they also pay $X amount? It is fair for all.

SandiF

Tell your employees to stop b...ing. I can't stand this entitlement attitude. Get a real job and see what it's like. All companies have had to cut back on benefits due to the skyrocketing prices. You're right that they don't appreciate what they have; they're ignorant of it. Maybe it would be good to show them how good their benefits are compared to companies in the private sector that are trying to make a profit by providing excellent service or products, not by getting taxpayers to supplement their expenses. Wouldn't it be nice to have your family's coverage pay? It always amazes me that companies can actually do this. I'm just grateful that our company has contined to pay for the employees' coverage.

I just felt like saying that. I feel better. Sorry I couldn't help you, though.

Don D

If only I had read all the responses backwards, as thoroughly confusing as they are, then coming upon the last one, RAD's; that one being the shortest of all but making the most, if not the ONLY sense, of all. The union negotiating team will sit there completely dumbfounded and unfailingly distrustful when you present this convoluted proposal. You are not negotiating with a group of benefits administrators or accountants. Simplify it if you want success.

Plan A - 250 deductible - employee portion $225 - plan pays 90%
Plan B - 450 deductible - employee portion $170 - plan pays 80%

People in negotiations require and deserve simplified examples to look at and decide upon. They will caucus forever and a day if you present what you have outlined.