More Public Employees Facing Higher Share of Health Care Contribution
Faced with increasing pressure to cover rising health benefits costs amid tighter budgets, some state and local governments are asking workers to assume more of their health care costs, the Wall Street Journal reports.
Connecticut, Kentucky, Texas and several other states this year have made changes to their workers' health benefits contributions. In addition, an increasing number of governments in recent years have reduced public sector employees' health benefits without major challenges.
However, public workers and employee unions in at least two states -- Michigan and New Jersey -- have filed lawsuits against the states for forcing them to contribute more toward the costs of their health benefits. For example, in Michigan, a plan to require state workers to pay 3% of their monthly earnings in the next fiscal year toward a trust fund for retiree health benefits met with resistance.
The lawsuits in the two states are expected to be closely monitored by other states that are facing problems providing employee benefits.
Gap Between Private, Public Sector Contributions
State and local governments' efforts to extract from their workers larger contributions toward health care costs come as awareness grows of the disparity between what public and private sector employees pay for coverage, the Journal reports.
Some critics have said that public school employees pay far less for health benefits than private sector employees, some of whom receive no assistance from their employer in purchasing coverage. Representatives of private sector employers and workers said that the shift is necessary to balance the contributions to health care costs between private and public sector workers.
The Michigan Chamber of Commerce endorsed the plan to increase state workers' contributions because it would ensure parity between the private and public sector contributions toward retiree health care.
Wendy Block, a health policy lobbyist for MCOC, said it was "unrealistic to think that employees in the public sector shouldn't have to pay anything toward their health care costs."
Block noted that without additional adjustments to health care contributions, "the state cannot maintain these obligations without busting the state budget" (Neumann, Wall Street Journal, 8/27).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.