Health Benefits Proposal Laid on Table – State Wants 74-26 Split

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, Aug. 26.—Washington state is demanding that state employees pick up a even bigger share of their health premiums than earlier reported – and the state’s largest public-employee union calls its position an insult.

            The state and its biggest unions went behind closed doors for their second round of talks on health benefits Tuesday, and both sides wound up drawing lines they say they won’t cross. Health benefits are the biggest sticking point in the two-year contract negotiations, precisely because there’s no other place to give. Already it’s clear that there won’t be any pay raises, because the state faces a $3 billion shortfall next year.

            Two weeks ago the state started talking about asking employees to pay a larger share of their health-insurance premiums – perhaps as large as 25 percent. That’s a big change – the 88-12 split has been in place for years and is sacrosanct, at least as far as the unions are concerned. That figure was a preliminary proposal, one of several scenarios the state laid out on the table, said Washington Federation of State Employees spokesman Tim Welch. Now the state has laid out its formal position – and it takes an even bigger bite from employee paychecks. The state wants 74-26.

            That amounts to a pay cut of roughly $2,300 a year for a state employee with full-family coverage, the union says.

            “This is really an insulting proposal,” Welch said. “We have given up so much already that we’re just not interested in any more takeaways on health care benefits, because it is so near and dear to the hearts of our workers and families.”

            No More Money

            In previous days, the state has maintained that it won’t speak about the negotiations, and it has let the unions do all the talking. But in a surprising reversal, state budget director Marty Brown spoke with the Olympian Wednesday. Brown told the newspaper that the state wants employees to cover the inflation in health care costs. That means the state would hold the line at the current $1 billion a year.

“Basically, we’re not going to put in any more than we did last time per person,” he said. The union basically has two choices. They can either talk about the percentage, the 88-12 that they always like to talk about, or they can talk about changes in the benefit plan… [The latter] means significant increases in deductibles, significant increases in copays and out of pocket [expenses].”

            The reason? “We don’t have any money.”

            In the background is a fact that few realize. The last time around, the state essentially took the same position, but in a roundabout way. Through a series of budget decisions, miscommunications between the Legislature and the state’s health-insurance agency, and outright mistakes, the state didn’t cover health inflation last time around, either. Although the 88-12 split on premiums remained in place, drawing fire from critics who called it overly generous, copays and deductibles dramatically increased this year.

            And toward the end of 2009, there was such a rush by state employees to take advantage of health benefits before the costs went up that the state Health Care Authority warned that program was headed for a $220 million deficit in 2011. The state insurance commissioner said that if the state program were a private concern, he would declare it insolvent. Lawmakers provided money this year to cover the gap – but the possibility of another run on doctors’ offices looms again.

            Right to Strike?

            The state and some 65,000 employees are at the bargaining table again this summer to negotiate contracts that cover the 2011-2013 period. And this time there’s no mood of conciliation in the air.

            The Federation, which represents 40,000 of those workers, says state employees have taken it in the shorts during the state’s two-year budget crisis. As lawmakers tackled an unprecedented $12 billion shortfall, they canceled scheduled cost-of-living increases, imposed furloughs, cut programs and laid off workers.

            It argues that the state ought to dip into its insurance reserves to maintain health benefits in the coming biennium, among other things.

            No further negotiating sessions are set on health benefits, and the law that established the collective bargaining process in 2002 does not provide for binding arbitration – just mediation.

            But what about strikes? The law doesn’t give employees the right to strike. But Welch points out that it doesn’t say they don’t have it, either. “So it becomes a legal issue,” he said.

            Not that the union wants it to come to that, he said. “We’re looking ahead to the second of November,” he said. “There are five really bad initiatives on the ballot. We’d rather be out doorbelling against those initiatives than holding picket signs.”