Delaware state employees’ unions push back on health care benefits changes

DOVER — For the second time in a year, Gov. Jack Markell and his administration could have a fight on their hands over state government employees’ health care.

Gov. Markell’s recommendations, unveiled Thursday, rely in part on changes to state workers’ health care to balance the budget. Under the governor’s proposal, premiums would increase between, depending on the plan, $1.98 and $19.48 per month.

The most dramatic change comes in the creation of a new Health Savings Account, a type of plan that allows the

Jack Markell

Jack Markell

state to contribute money that is used to pay for health care. For an individual, the state would contribute $1,000, with a $2,000 deductible.

Both amounts would be doubled for families. All employees who start after Jan. 1, 2017, would be locked into that arrangement rather than being able to choose from one of six health care plans.

Further proposals, such as higher emergency room copays, will be discussed in the forthcoming months by the State Employee Benefits Committee.

While the administration has repeatedly highlighted the importance of the changes, noting health care expenses are skyrocketing due to high costs and a population that is aging and unhealthy, many state workers are certain to push back on the recommendations.

On the flip side, the governor also included a pay raise in his budget. Employees making less than $50,000 would get a flat $500 increase, while those earning more would receive 1 percent.

The pay increase will undoubtedly buy the administration goodwill with state employees, but will it be enough to allow the health care changes to pass without resistance? The presidents of both the state police and correctional officers’ unions say no.

Geoff Klopp, head of the Correctional Officers Association of Delaware, is the only union representative on the State Employee Benefits Committee, and he thinks the modifications will be tough to get through the group.

The pay increase “is still basically offsetting the medical costs and they’re not doing anything to move state employees forward,” he said.

Tom Brackin, president of the Delaware State Troopers Association, had similar sentiments, calling the plan “problematic for sure.”

Neither state troopers nor correctional officers would receive the salary increase, as both groups are subject to collective bargaining agreements, making them exempt from general pay raises. They do, however, use the same health care plans offered for all other state employees. Representatives from other employee unions were unavailable for comment.

Learning from the past

The administration is undoubtedly hoping to avoid a repeat of 2015, when a push to raise copays, premiums and deductibles failed. Many state employees spoke against the hikes in the spring, and lawmakers, faced with unhappy constituents, used their influence to reject the ideas put forth by the State Employee Benefits Committee.

In the end, the state allocated some General Fund money and made smaller changes, such as copay and drug cost increases, to balance the budget.

The premium increases proposed this year are very similar to last year’s outline, and Mr. Brackin and Mr. Klopp see them as a nonstarter.

The state plans to balance the budget “on the backs of state employees,” Mr. Brackin said.

“A lot of people come to state employment for the benefits package because the pay is not commiserate with private industry and they’re tipping the balance point to where the balance of the pay and medical doesn’t equal out to what it used to,” Mr. Klopp said.

Gov. Markell and his cabinet have a drastically different view.

With no changes and no increases in spending, Delaware would be in a projected $383 million health care shortfall in five years, budget officials stressed Thursday.

House Minority Leader Daniel B. Short, R-Seaford, points to old friends on the first day back at Legislative Hall. (Delaware State News/Dave Chambers)

Daniel B. Short

According to the executive branch, the state covers about 90 percent of workers’ health care premiums, leaving employees to pay between $25.86 and $253.38 monthly based on the plan.

Minority Leader Rep. Daniel B. Short, R-Seaford, said he sympathizes with Gov. Markell — an instance where Democrats and Republicans are on the same page.

“It’s tough,” he said. “You know, I do it for a living, but that’s what’s going on in the other world, that’s what’s going on in the private sector. I mean, the private sector is nowhere close to the contribution side that we are. The private sector is maybe paying for all of the employee, maybe paying for just part of the employee and none of the dependents.”

Office of Management and Budget Director Ann Visalli said she does not foresee trouble like last year over the changes, although Gov. Markell did acknowledge the proposal could be altered,

“I think this is sort of how the process plays out. I think there will be a lot of people saying, ‘Can we improve this or change this?’ and I think that’s just how the process will play out,” he said.

Ann Visalli

Ann Visalli

Ms. Visalli said some of the ideas presented by the administration come out of discussions a health care task force had in the previous six months, but on that note, her and Mr. Brackin differ.

He believes the group’s recommendations were largely ignored. The best option, he feels, is for the state working with hospitals and other providers to lower costs.

“All of that work and that effort seems to have gone for naught,” he said.

Administration officials and some lawmakers acknowledge the costs are becoming untenable and must be dealt with. Despite the planned changes, they believe the benefits offered by the state still remain very attractive.

Ms. Visalli and Mr. Brackin also disagree on the Health Savings Account. She said it is something employees have requested, while Mr. Brackin feels it is unfair to “force” employees into one plan.

As for further changes, such as raising emergency room copays and incentivizing employees to seek less expensive care, on that there could be less disagreement. Mr. Klopp said he is in favor of discouraging employees to visit the emergency room and pushing them to be healthier.

Ms. Visalli said she has spoken to state employee unions, and as the budget process progresses, the administration will undoubtedly speak to and hear from more workers.

Although the union executives are skeptical of the new health care proposals, employees should come out ahead. The most expensive plan would cost an additional $233.76 over one year, while the vast majority of workers will earn more than that in pay raise.

That raise is well deserved, Gov. Markell said, noting the executive branch is down 680 people since January 2009. It would be the fourth pay raise in his tenure.

Sen. Harris McDowell, D-Wilmington, the chairman of the Joint Finance Committee, said he might try to push for a higher increase.

“I would like to see a little more there, but there’s some other things we’ve got to work with and see, but that’s something that’s been lagging very, very far behind,” he said.

The Joint Finance Committee is scheduled to meet for 10 days this month while the General Assembly is on break. Meanwhile, the State Employee Benefits Committee will continue discussing further ideas, and the administration will be able to see how the state’s many thousands of employees respond to the budget proposals.

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