Even After New Contribution Levels, State Benefit Packages More Lucrative Than Private Sector Offerings
MacIver News Service | April 3, 2012[Madison, Wisc…] Even after the labor reforms ushered in by Act 10, Wisconsin taxpayers pay more than surrounding states to provide insurance to state employees, according to a new study released today.
The analysis by HCTrends found that even after increasing the state employee premium contribution and making plan changes to reduce costs, Wisconsin taxpayers also continue to pay significantly more to provide these benefits than most private‐sector employers in the greater Milwaukee area.
The study did find that increasing state employee premium contributions and out‐of‐pocket costs did reduce Wisconsin’s health plan costs, which made the state more competitive with surrounding states.
However, state employees here have far more coverage options than their peers in the Midwest.
“Wisconsin offers its state employees more health plan options than any of the other states analyzed,” the report states.”Employees choose among 26 insurance plans that provide coverage based on a statewide uniform benefits plan.”
HCTrends analyzed 2012 state employee health plan benefits in four neighboring states (Illinois, Minnesota, Iowa and Michigan) and compared them with the benefits offered to state employees in Wisconsin. The analysis also compared Wisconsin state employee benefits to those offered to private‐sector employees in southeastern Wisconsin.
- Wisconsin taxpayers will pay $13,972 to provide health insurance to a state employee, which is 9 percent ($1,207) more than taxpayers will pay in Michigan, the next most expensive state, and 21 percent more ($2,433) than the average per‐employee cost for taxpayers in the five states analyzed
- Wisconsin taxpayers will also pay $3,762 more per employee than large private‐sector companies with union workforces and $5,565 more than large non‐union employers
- In Michigan, the employee contribution also depends on the length of time the employee has worked for the state. Employees hired before April 2010 contribute 7.2 percent of premium, while employees hired after April 1, 2010 pay 15.4 percent. The newer hires also have slightly less generous health benefits
- In Illinois, premium contribution is based on both the employee’s income and the plan selected. An employee earning $30,200 per year pays $564 per year for single coverage for the state’s primary plan, while an employee earning $75,901 pays $714. State employees pay an additional $110 to $226 per month, depending on the plan they select, for family coverage
- State employees in Minnesota pay a fixed rate ($0 single/$1,562 family), but their cost‐sharing is determined by the provider group they select. Deductibles vary by as much as $550 for single coverage and $1,100 for family coverage depending on the provider group selected
- Iowa has both the least expensive and the most generous health plan among the five states analyzed. The plan, which costs the state an estimated $9,686 per employee per year, is offered to state employees free of charge. The plan does have an out‐of‐pocket maxiamum for state employee plans ($750 single/$1,500 family), but it is unlikely that many employees reach the threshold given the plan’s minimal co‐insurance rate and low copays
The complete report including a comparison of benefit design and health plan costs is available at HCTrends.com