Let’s enroll state workers in the federal employees health benefits plan…problem solved. Concessions, what concessions? Take a closer look at these benefits.

While many politicians, including the President, whine over the plight of state workers being asked to pay some or a greater portion of the cost of their benefits, especially health benefits, they are missing a great example to follow.

$312.87, do you know what this number is?  It is the average family monthly premium paid by federal employees for their health benefits (non HMO).

I know that because I calculated it from the 2011 published rates. I also know that there was about a 7% increase over 2010 premiums. Many of the plans in this average are high deductible health plans (HDHP) which means participants have a potential for significant out-of-pocket costs on top of premiums. The lowest premium on the list was $170.41 per month and the highest $682.96.

Compare that with the state worker. In New Jersey for example they recently started paying 1.5% of pay. Let’s see, for someone earning $50,000 a year that amounts to $62.50 per month and for that rare $100,000 earner it is $125 per month. Notice we have not reached even the least costly federal plan.

In addition, when a federal worker retires they keep the same benefit and pay the same premium. Except within the last two years New Jersey retirees paid nothing. Today they make a minimal payment.

By comparison, a new employee in one of New Jersey’s largest company’s contributes $361 per month regardless of pay. In other words, the private sector worker earning the same as the State worker pays about $3,600 more a year for coverage as does the federal worker. I won’t bother comparing the pensions or health plans. Let’s just say the state worker wins.

Those federal unions seem to have missed an opportunity to negotiate a better deal. Oh, federal employees cannot negotiate? Somebody please tell the White House staff.

And while we are on this subject…again, let’s talk about all the concessions we are hearing about.  In Wisconsin the unions have agreed to contribute 12.6% of the health benefits premium.  I hope that makes you feel better even though that is only about half of what the average worker in the private sector pays. They are also going to pay 5.8% of their pension.  The average worker in the US does not even have a pension, but typically has to contribute at least 6% of their income to a 401(k) plan to get the full employer match.

In Hawaii, where the pension plan is underfunded by $7 billion, the concession they are seeking from state workers is to eliminate the State reimbursing retirees for their Medicare Part B premium. Hawaii is not the only state paying the Medicare premium.  Who pays your Medicare premium?

How about these provisions, would you like to have these benefits?   You get a cash payout for unused sick time added to your pension calculation (with no limit).  Or, here is a deal from a state pension plan, you can take a loan from the plan and pay 4% interest while the fund assumes a rate of return of 8%.  

This is all the result of “negotiations” between public employee unions and state politicians.

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