State Workers to Pay More for Health Benefits

Office of Representative John Scibak
"It sounds like you are selling your employees up the river, but that was never the intent," Massachusetts state Representative John Scibak says of the health benefits changes he supported.

Amidst all of this year's furor over collective bargaining for state employees, there has been relatively little public attention devoted to what may be the most tangible loss for them in rewriting the rules: health care benefits they have long taken for granted.

Almost every state that has dealt with public workforce issues in 2011 has made substantial reductions to the package of health care that employees will be getting in the future.

Some of the changes may seem trivial, such as the cancellation of reimbursements for wart and bunion removal and breast reduction surgery in Oregon.

Others will come straight out of the wallet. State employees in Connecticut who go to an emergency room but are not admitted have never had to pay for that visit; now they will have to pay $35. Perhaps most important, public workers in many states will be asked to contribute more of their paychecks to the health services they receive.

Underneath these debates is an argument about whether and how changes to health benefits should be collectively bargained. The Massachusetts House of Representatives, one of the most heavily Democratic state legislative bodies in the country, voted earlier this month to dramatically decrease the leverage of local employees over health care and other benefits. The bill would allow municipal governments and school districts to change health plans and increase out-of-pocket expenses without union approval. As a consolation, employees would get a share of the cost savings in the first year to ease the transition to paying more for some services.

The bill has been excoriated by the powerful Massachusetts public employee unions, which accused House members of betraying them with "Wisconsin-esque" behavior, referring to the measure that eliminated most collective bargaining rights for Wisconsin state employees. The Massachusetts Senate is considering a milder version of the House-passed measure.

The House bill carried serious political risks for Massachusetts Democrats, who have long been closely tied to the public employee unions. It passed largely because of a growing recognition that health care costs, rising rapidly at the state level and even more rapidly in localities, have the potential to cripple school spending and throw entire budgets out of control. "It sounds like you are selling your employees up the river," says Massachusetts state Representative John Scibak, a Democrat who chairs the Joint Committee on Public Service and backed the change. "But that was never the intent."

Unions respond that they have foregone years of salary increases so that they could preserve or improve their health benefits. The math governing their overall compensation would change dramatically if their benefits were to shrink.

Union anxiety

Neighboring Vermont, another state that is firmly in Democratic control, is making the transition to a single-payer, state-run health care system. It decouples health insurance from employment and puts all state residents in a single pool. Most of the state's public employee unions have officially supported the new system, but a high level of anxiety exists over how the plan will affect hard-won health benefits.

"We've made sacrifices along the way to get this kind of coverage, and we're going to do everything we can to keep it," says Martha Allen, president of the Vermont Education Association. State Representative Paul Poirier, a Democrat who is helping to design the single-payer system, insists that removing health benefits from contract negotiations may make salary increases more likely in the future. "If we take health care off the table," he says, "unions will be able to sit down and talk about the main issue, which is wages."

In New Jersey, contract negotiations between public employees and the administration of Republican Governor Chris Christie have been hampered by disagreements about whether proposed changes to health benefits should be made at the bargaining table or in the legislature.

The Communications Workers of America, New Jersey's largest public employee union, filed an official complaint with the state Public Employment Relations Commission earlier this month, alleging that Christie is violating state law by pursuing health benefit changes through legislation and refusing to respond to a health care proposal the union put forward months ago. Christie's action, the complaint alleges, "violates the State's obligation to negotiate in good faith over terms and conditions of employment, including health benefits."

The Christie administration dismisses the complaint as a "public relations circus." Kevin Roberts, a spokesman for Christie, says the unions "have a history of picking and choosing what should be bargained and what should be legislated when it best suits their own interests … They've been happy to use any procedural means available, inside and outside of the collective bargaining process, to secure expansions of health benefits."

Roberts argues that the unions never objected to changing health care benefits through legislation when the result would be a higher level of coverage. Union officials claim that changes to health benefits through legislation were initially ironed out at the bargaining table and merely implemented by the legislature.

Cost sharing in Michigan

In Michigan, some municipalities and school districts are quietly supporting a measure that would require an 80-20 employer-employee split in health insurance costs. The plan passed the state Senate last week. The bill's sponsor, state Senator Mark Jansen, says he hopes increased cost sharing will give unions an incentive to do their part to cut costs. Plan design changes and co-pays will remain collectively bargained. "I'm not trying to bust any unions," Jansen says. "I'm just saying we've got to use more common sense in this process."

The Michigan Association of School Boards is supporting the measure because it says collective bargaining over benefits has been difficult for many of its members. "Health care is the most contentious issue at the bargaining table," says Don Watruba, director of government relations for the Michigan Association of School Boards. "We need faster change than the bargaining table is allowing us to have."

Watruba says one reason it is difficult for districts to cut health care costs through contract negotiations is that many local unions are reluctant to move to anything other than the union-sponsored plan. "It's pretty easy," he says, "to effectively scare members into thinking that anything other than that package isn't going to serve you that well.


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