Issue of the Month—State Health Insurance Act (Senate Bill 7)

There has been a lot of interest and discussion about the effects of the recently passed Senate Bill 7 that establishes requirements for public sector employee cost sharing of health insurance premiums. The new law either caps the amount to be paid by an employee, or limits the employer contributions at no more than 80% of the health care premium cost. The new law takes effect on January 1, 2012.

It is good to know our county management has been doing an excellent job of aggressively bargaining with employee unions during the past several years regarding costs of health insurance premiums. Our current level of employer contributions averages about 85% of the cost—and employees are paying about 15%. This would seem to indicate we would have to re-negotiate a small amount within some of the contracts to get within the prescribed employer/employee contribution ratio. However, even better news is that the union contracts of the past several years actually have enabled us to fall within the “capped” amount of employee contributions for the 2012 budget year. Our management is currently in negotiation with five bargaining units and will have to discuss how the costs of health care premiums get paid for subsequent years. But for now it appears the new law won’t seriously affect our county budget figures for health insurance costs. Unfortunately some other public employers—schools, other counties, cities—may have a more difficult time.