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Legislators push for state employee wage increase complicated by higher cost of insuring them

Legislators push for state employee wage increase complicated by higher cost of insuring them

Idaho Freedom Foundation staff
January 14, 2014
[post_thumbnail]Sen. Sheryl Nuxoll, R-Cottonwood, favors a pay increase for state employees rather than paying an insurance company millions more in premiums to provide coverage in fiscal year 2015.

A bipartisan group of Idaho state legislators has recommended that state employees be given a one-time, 2 percent pay increase during fiscal year 2015. Yet, wages aside, the Idaho Department of Administration (IDA) has announced that merely maintaining current health insurance plans for state employees will cost Idaho taxpayers an additional $23.8 million during the same fiscal year.

“For fiscal year 2015, the state projects an increase to the total plan cost of $23.8 million, bringing the projected total plan cost for fiscal year 2015 to $269,330,000,” said Jennifer Pike, spokesperson for the IDA. As IDA defines it, the “total plan cost” includes the price of insurance premiums, deductibles and co-pay costs.

The price increase for state employee health insurance was revealed last week when Teresa Luna, director of the agency, released her department’s budget findings and projects to the Joint Finance-Appropriations Committee (JFAC), a committee of both House and Senate members that oversees state budgets and spending. Luna attributed much of the cost increases to new fines and taxes entailed in the implementation of the federal Affordable Care Act.

According to Rep. Ron Mendive, R- Coeur d'Alene, a member of the Change in Employee Compensation Committee that recommended pay increases for state workers, the recommendation is not binding, and will also have to be reviewed by the JFAC committee.

Pike says that Idaho provides state employees with health insurance benefits purchased from Blue Cross of Idaho. Zelda Geyer-Sylvia, an executive with Blue Cross of Idaho, is a voting member of the board of directors that oversees Idaho’s government-run health insurance exchange, an operation that Gov. Butch Otter and many members of the Legislature have promised will help keep health insurance prices within the state relatively low.

When asked if the state insurance exchange could help prevent the rise in state employees’ health insurance costs, Pike told IdahoReporter.com that “I’m not aware of any discussions about that going on at this time.”

Pike did, however, outlined the projected cost increases for 2015 breakdown as follows:

$1,370,000: increased state administrative costs
$3,880,000: increased taxes and fees levied via Obamacare
$18,620,000: increased claims and claims administration

According to Pike, the projected cost increase of $18,620,000 for state employees’ insurance claims and claims administration is not because of an increase in the number of state employees or an increase in health problems among those employees.

“While we do cover slightly more lives this year than last, the increase in our health care costs is in line with national trends,” Pike stated. “The majority of our population (the population of state employees) is healthy.”

In light of these developments, Sen. Steve Vick, R-Dalton Gardens, told IdahoReporter.com that “what has to be addressed is the rising cost of health care itself.” Vick suggested that allowing for higher individual deductibles is one course of action that needs to be explored, but he also said that allowing state employees to have Health Savings Accounts is another option that should be considered. “We need to provide choices to state employees,” he noted.

Sen. Sheryl Nuxoll, R-Cottonwood, a member of JFAC, spoke with IdahoReporter.com after Luna’s disclosure of the increased cost of insuring Idaho state employees. ”How can the state government ask Idaho taxpayers to pay for increased fines and taxes being imposed by Obamacare?” she asked. ”I'd rather that state workers get an increase in their wages, rather than have the state pay all that additional revenue directly to the insurance company.”

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