Is it time for Cities and Towns to address health Insurance like private businesses?

ACA

I hear over and over that Health Care cost are a huge burden to cities and towns. We all know Health Care cost keep going up and under the “Affordable Care Act”.

Is it time that City Managers, Town Manager’s, Mayor’s and Administrator’s take a look at ALL the related cost that go with health care and start forcing Unions and all Municipal employee’s to make the same changes that private sector businesses have already been forced to make?

A 2013 survey by consulting firm Towers Watson found that in 2014 18% of employers required that workers’ spouses buy insurance from their own employer before turning to the surveyed company for insurance.

Some 15,000 UPS spouses who can obtain health coverage through their own jobs were dropped from the UPS Health plan in 2014 (Full disclosure I was among them). In a memo to employees, the company explained that the change was intended to offset the effects of the Affordable Care Act, which were expected to increase its health care costs by ay least 4% in 2014 and 7%-9% the following year.

By denying coverage to spouses, employers not only save the annual premiums, but also the new fees that went into effect as part of the Affordable Care Act. In 2013 companies had to pay $1 or $2 “per life” covered on their plans, a sum that jumped to $65 in 2014. Health law guidelines mandate coverage of employees’ dependent children (up to age 26), but husbands and wives are optional. These “spousal carve-outs,” or “working spouse provisions,” generally prohibit only people who could get coverage through their own job from enrolling in their spouse’s plan.

How much could a city of town save in Health Care Cost by eliminating the spouse? Unions want raises and we already know most City’s and towns can’t afford to keep giving them. If Unions want more for their workers, than maybe it’s time to make their members spouses get health insurance from their own companies.

Such exclusions barely existed three years ago, but experts expect an increasing number of employers to adopt them in the next few years. Is it time Local and State Government to do the same?

If Not omitting spouses how about requiring those that have spouses that can get insurance pay an additional cost? Again in the private sector that occurs now according to information I found on line.

About a fifth of companies had policies to discourage spouses from joining their health plan in 2012, though most just charged extra—$100 a month, on average—to cover spouses who could get insurance elsewhere, rather than deny coverage entirely. Indeed, large firms including generics maker Teva and supply chain manager Intermec have spousal surcharges costing $100 a month, or $1,200 annually, while Xerox charges $1,000 for the year. In 2014 33% of companies planned to impose a surcharge on working spouses, up from 20% from 2013.

This year, half of firms with more than 1,000 workers had spouses pay more for their health premium than workers do, according to Towers Watson’s research. One-quarter of large firms charge spouses more for coverage when they have access to employer-sponsored coverage at their own job but turn it down. Another 15% plan to go that route in 2015. How much more? On average, couples pay an extra $1,200 a year.

Doing this no doubt hurts those on the lower end of the pay scale because while it reduces their own cost of health care out of their check, it usually ends up costing the other spouse more out of their check and coverage isn’t as good if the spouse works at a smaller company or is self employed. Premiums are higher and so are deductibles usually.

We were warned several years ago that “The private sector can no longer afford the private sector” and that is being proved all over this state.

Is it time to take a stand and make the Unions accept some changes that save city and towns at least some money in health care cost (even if it’s only to pay it out in salary increases?)

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