Fair Health Insurance Costs

DB

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. We have to make a change and 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. Please give me your input.

LBL

We do something like option #1 in that our senior management pays a bigger share of the premium, middle management a bit less than senior, and non-management pays the least share of the premium. However, all three amounts are flat amounts and not the percentage of salary you are suggesting. It's very easy for us to change the three amounts annually, and non-management employees don't complain much since they see that management is paying more.