Ky. Chamber: State workers should contribute more for health insurance
FRANKFORT — The Kentucky Chamber of Commerce recommended Monday that state employees and retirees pay more for their health insurance, a move that could shave $188 million from a potential $1.2 billion state budget shortfall over the next two years.
The business group said Kentucky can no longer afford to provide generous health benefits that dwarf what most private workers receive.
The average state worker pays for only 3 percent of his or her health insurance premium, compared to 20 percent for the average private employee in Kentucky, said Dave Adkisson, president and chief executive officer of the chamber.
The total cost to provide health coverage for 258,169 teachers, state employees, state retirees and their dependents is more than $1.2 billion a year — about $607 a month for each of 156,683 state workers and retirees, Adkisson said.
Since 2000, the percent of the state budget going to public employee health coverage has more than doubled — from 6.5 percent to 12.5 percent this year, he said.
Lee Jackson, president of the Kentucky Association of State Employees, immediately blasted the plan.
“We would oppose any attempt to tinker with state workers’ health care benefits,” he said.
Gov. Steve Beshear and legislative leaders voiced appreciation for the chamber’s work but took a wait-and-see approach on the proposal.
“We continue to research options for our own employees, and we always welcome additional input from our citizens,” Beshear said in a statement.
Senate State and Local Government Chairman Damon Thayer, R-Georgetown, said the state “is going to have to look at every option.
“We are not going to raise taxes, so we will have to look at reducing the size of government,” he said.
Thayer’s counterpart in the House, Rep. Mike Cherry, D-Princeton, said he would give the chamber’s plan “careful study … but I can’t say I’m endorsing it.”
Adkisson said in a conference call with reporters that requiring state workers to contribute $50 a month more for health coverage would save the state about $94 million a year.
Such a move would not actually cost employees the full amount of their contribution, he said, because those contributions are exempt from taxes.
Employees would be able to reduce their tax liability by $600 a year, a tax savings of up to $149 a year for an average state worker, Adkisson said.
A summary of the chamber plan also noted the “frequently heard argument” that state workers should get more benefits because they earn less than those in the private sector.
However, the chamber said the average annual salary of state employee was about $38,000 in 2008 — higher than the $36,855 average annual wage for all occupations in the state.
Another cost-cutting solution, Adkisson said, would be to provide employees with a fixed dollar amount indexed for inflation to buy life and health insurance and other fringe benefits.
This would require employees to contribute some additional amount for health coverage, depending on the level of coverage selected. Total savings would depend on the amount of subsidy provided.
Adkisson also suggested incentives to employees who participate in wellness programs.
He noted that Alabama will up its state health insurance premiums from $25 a month to $50 a month next year, but an employee can avoid the increase by participating in a health screening program and, if necessary, a wellness program.
Some states also provide cash awards and vacation time, he said.
–Jack Brammer
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Steve | Nov 9, 2009 | Reply
This does not take into account that we have not had our 5% raises for the past nine years. We have given enough and can’t afford to pay more.
Rick | Nov 9, 2009 | Reply
How about we pay what you pay Mr. Dave Adkisson?
Melissa | Nov 9, 2009 | Reply
Amen, Steve!! Why don’t we have AOC pay for it after their big raises…
RickinLex | Nov 9, 2009 | Reply
Steve,
No 5% in the last 9 years…..boo hoo. There are a number of people who do not get 3% much less 5% raises each year and they have to pay 20% (increasing every year) of their insurance coverage instead of 3%. In addition most of the public does not have a state retirement plan as well.
Chris Robbins | Nov 9, 2009 | Reply
Time to raise coal severance taxes and eliminate the corporate tax loopholes in the state. Why shouldn’t we offer the best possible benefits to our state employees to try to attract the best talent?
Kentucky Anne | Nov 9, 2009 | Reply
Very short-sighted on the Chamber’s part. The state employees are the ones spending money at the members’ businesses. Why would the Chamber want less money in the pockets of state employees which would result in less spending in the community?
Myrtle | Nov 9, 2009 | Reply
A better idea would be to eliminate all the non-merit positions, which amount to nothing more than political payback. Most of these hacks don\’t do anything, or just come in and mess things up for the merit employees that have to answer to them when they don\’t even know what they\’re doing. I bet you\’d save a lot more than 94 million if you got rid of those positions!
KY1911 | Nov 9, 2009 | Reply
What a great idea..lets further decimate the ranks of state employees by providing them absolutely no reason to stay with the state. The benefits for state employees are the ONLY recruitment tool government has to get half-way competent staff. If not, these folks are going to go somewhere else. Might not seem like such a big deal, but combine this with the increasing number of state retirees and you run the risk of literally having no one who knows how to operate government (on the face of it your saying “good”…but believe me, it won’t be).
PoorSteve | Nov 9, 2009 | Reply
Poor Steve, no 5% raise in 9 years huh? Our company hasn’t given a 5% raise in the last 15 years….heck, I’ve never seen more than 2 or 3% and that is being a top performer. For us, no raises in the last 2 years at all and frozen pay for the next 2. We pay over $500 per MONTH in benefits with it going up in 2010 by almost 10% again.
Won’t say the company, but is one of the largest in Lexington.
Oh…and our retirement was taken too!!
So boo hoo, I feel so bad for you!! (get a real job instead of your cushy state job and then I bet you won’t complain so much)
Mikey | Nov 9, 2009 | Reply
Judging by my interactions with most state employees I have no worries about losing any “talent” to health care cost increases.
John Colby | Nov 9, 2009 | Reply
Yeah, I love how you want to say that state employees get too much of this or that but from some reason it apparently isn’t such a great place to work since you work some other place.
I haven’t seen one complaint about private industries excessive salaries, excessive “bonus” programs or misuse of funds.
What’s up with that?
Myrtle | Nov 9, 2009 | Reply
Sounds like you need to get a state job – paying over $500 a month for benefits & no raises. Boo hoo hoo yourself moron!
Morpheus | Nov 9, 2009 | Reply
Hey, I once used to blast State workers and their pay, benefits, and any other extras….. Then I realized I was working in the wrong industry. So I started working for state 2 years ago. Saved myself $100-150 in insurance. each month.
“Poor Steve” sounds like they need to realized they are headed the wrong direction if their insurance keeps going up. My did too at my previous job. Each raise I was getting was wiped out by increased premiums. So “poor steve”, working for govt, local, state, federal isnt really so bad as the job you express where you just dont have the courage to ” get out” of the unhappy situation you are in.
Oh, it takes a while to get to that avg salary. That was probably for career employees (16+ years) who were getting 5% every year. I’m sure those numbers would be different for employees hired within the last five years-10 years.
Employed w/Insurance | Nov 9, 2009 | Reply
I am a school employee and must cover my disabled husband and child on my heath insurance. Even though I have 20 years in the system and work full time 12 month contract(no… I do not get off for the summer) this is the first year I will make $30,0000 and my annual insurance premiums are over $7,000.00! I cannot afford to pay more for my health insurance.
John | Nov 9, 2009 | Reply
Instead of asking the hard working employee or the retiree to contribute more of there limited income for health insurance…ask the providers who are charging such outrageous fees to cut back their prices.
Richard | Nov 9, 2009 | Reply
Governor Bershear would be well advised to rememebr the beginning of the end of the Fletcher administration was when he mettled with the healthcare of state employees.
Pappy | Nov 9, 2009 | Reply
tar & feather Dave Adkisson and cut his salary, will save money, these idiots that come up with this crasp, makes me sick. Look at poor stupid Dave Adkisson, the chamber of commerce, whaqt a joker.
Lynn | Nov 9, 2009 | Reply
Richard:
You are right. One sure way to lose re-election is to tick off state employees and teachers. Ask Ernie Fletcher…..
Biz Lex | Nov 9, 2009 | Reply
Mr. Adkisson fails to mention that 95,000 members of the state health group are teachers and boards of education employees. Thus, the Chamber–a very progressive organization–is proposing a cut in education. His ridiculous proposal to provide employees a fixed dollar amount and then increase it with inflation would eliminate health insurance benefits for teachers over time. Health insurance costs are increasing at a rate of 8% to 9% per year and inflation is increasing at around 1% if at all. At that rate, health insurance benefits would be eliminated. Of course, the Chamber undoubtedly does not favor a public health insurance option so apparently only wants health coverage for the wealthy. Mr. Adkission is wrong in indicating that premiums for state employees are only 3% of coverage. Kentucky ranks behind according to national benchmarks in subsidizing family and parent plus coverage. The Chamber is about as progressive as Commerce Lexington when it indicated that development should continue whether or not sanitary sewer lines lacked capacity and would flood basements and streams with sewage. Mr. Adkission is a sorry representative for the business community in Kentucky and should be replaced. He appears to be nothing more than a mouthpiece for Senator David Williams and the right wing lunatic fringe. At one time the Chamber advocated change that benefited Kentuckians, particularly in education, but that time apparently is past.
stateworker | Nov 9, 2009 | Reply
As an engineer for state who has colleagues in the private market making over 10% more annually better benefits are the only thing that keeps state workers where they are. If they want to cut jobs they need to with the $100,000 a year appointee’s from the governor not the jobs at the bottom making less than $30,000 a year.
Chris | Nov 9, 2009 | Reply
This is outrageous!!! The legislature took a half million dollars from the employees health insurance fund and put it in the general fund!! Why…to balance the budget. The legislature said there was plenty of money left in the account to take care of everyone’s expenses. I thought our rates would go down for 2010 but they increased them. So let’s make the employees pay more so they can take more from the fund to put in the general fund. We have only had a 1% raise for years now, that doesn’t even come close to the cost of living increases. It’s sad too we have to let the teachers fight the battles for the rest of the state employees.
Christy | Nov 9, 2009 | Reply
I pay over 10% of my salary for health care. I pay over $500 just in premiums. The past two years I have paid over $2,000 in co-pays and deductilbes. So my average salary of 36,000 minues 8,000 leaves me with 28,000. Gosh maybe the Chamber needs to go back to school. This is almost 25% of my salary. This figure does not include dental insurance or vision insurance. If I have to pay any more for insurance, I can sign up for food stamps and free lunch. Thanks Chamber. I sure think Mr. Adkission needs to redo his homework!
Colorful | Nov 9, 2009 | Reply
What the legislature needs to do is to repeal the dozens of special interest tax breaks and loopholes that the Chamber of Commerce has won, through lobbying, for its corporate members. Let them pull their own weight instead of freeloading off of taxpayers.
GinaL | Nov 9, 2009 | Reply
There are a lot of things not taken into account, like we probably make 20% less than we would in the private sector. This plan is one proposed by an organization that looks out for businesses not people. I learned long ago to never trust any Chamber of Commerce, commerce being the key word here. And breaking an agreement with retirees is also deplorable. Looks like AdKISSon is doing just that KISSing up to big business. Better idea would be to stop any funding by any public or private entity to the Chamber of Commerce. That would save a lot of money all around.
Lynn | Nov 9, 2009 | Reply
And if businesses would quit paying money to the Chamber of Commerce then they would have more money to put back in their business and perhaps hire some employees.
Adkisson is a buffoon. Crit should audit the Kentucky Chamber of Commerce, probably the same as KACO, KLC, the Airport and the Lex Library.
Rick | Nov 9, 2009 | Reply
So the state pays $605 per employee well I almost match that, I have the lowest level I can have and i pay $525 a month. My bring home pay is actually less today than it was 4 years ago, my insurance goes up higher than my raise each year. Something is wrong here.
'Ole john | Nov 9, 2009 | Reply
Mr. Adkisson, sir. Your information is faulty, at best. I began teaching for $4,137 annual salary. Taught for 27 years. Averaged $24,490 annual. We were promised health insurance upon retirement. You and your political ‘hacks’ took millions from our retirement system to pay for state politician’s pork projects. Not one dime has been repaid. Not one dime in interest. Today’s politicians don’t have the backbone to raise funds to pay for their projects, nor pay their debts to the KY Teacher’s Retirement Trust Fund. Please, fund the losses from our Retirement System that your hacks borrowed (took) and we might be able to pay our way?
Interesting | Nov 9, 2009 | Reply
It’s obvious that Mr. Adkisson has never worked for the state.
Paul Kelley | Nov 9, 2009 | Reply
Government employees get 40% higher salary than comparable jobs in the private sector. their benefits are 60 % higher.
http://mwhodges.home.att.net/state_local.htm We need to stop these public service parasites before they bankrupt our state like California. Let them go to a private sector job most of them could not last two weeks.
Buck Feshear | Nov 10, 2009 | Reply
I’ve worked in similar jobs in both the private sector and state government. The salary is higher in the private sector but the benefits are better in state government (vacation days, sick days, holidays, etc.) It’s a tradeoff as to which means more — the actual take-home pay, or the benefits.
Lynn | Nov 10, 2009 | Reply
Paul Kelley:
You are a fool, plain and simple.
Bill Adkins | Nov 10, 2009 | Reply
“Senate State and Local Government Chairman Damon Thayer, R-Georgetown, said the state “is going to have to look at every option.
“We are not going to raise taxes, so we will have to look at reducing the size of government,” he said.”
Thayer is exactly what’s wrong with the legislature and why we’re where we are today. He and Williams, like Ernest Fletcher,kept singing this mantra since before Ernest was elected — and it’s a road map as to how we got into this mess. Face it, folks – this ‘limited government’ philosophy along with bank busting policies delivered the Great Recession as a land mark on the way to the Great Depression II. It’s why the lights are going out in state government, why the roads and bridges and buildings are not being repaired. Heckuva job, thayer.
zento | Nov 10, 2009 | Reply
They need to base these figures on what ‘merit’ employees are making and not take into consideration the salary of ‘non merit’ people that serve at the pleasure of the governor. Non merit salaries drive up the figures and make it appear state employees are making a much better wage than they actually are. I would like to see an average salary for merit employees only, then a average salary for non merit employees. You can also bet if they decide to ‘reduce’ the size of state government it won’t be Frankfort jobs, it will be the state employees out here in the field with fewer prison workers, state troopers, social workers, etc. Those pencil pushers in Frankfort will keep their jobs.
Buck Feshear | Nov 10, 2009 | Reply
Adkins, I hope you can afford to pay higher taxes. With my paycheck and expenses, I sure can’t. When individuals are faced with rising expenses and stagnant or declining income, they are forced to make cuts. Government should do the same.
Jim Anderson Stivers | Nov 10, 2009 | Reply
During my time in state government I worked often with the Kentucky Chamber.
Talk about a cushy job. All these guys have to do is meet, tell others how they should handle their affairs, have several cocktails and go back to the comfort of their recliners.
Work for the Kentucky Chamber is nothing more than a SHAKE AND HOWDY deal. Officers get good pay, good health coverage, and get to mix with the the politicians so they can lobby for small business in politics.
The Chamber of Commerce on a state and a national level have changed from what the original challenge was.
To complain state employees need to pay more their insurance is a political tone that pretty much follows the NATIONAL CHAMBER, one of the more powerful groups that has been opposing health care reform.
Talk about having your head up your . . . .these cocktail party guys need to get a life
Lynn | Nov 10, 2009 | Reply
Well said, Mr. Stivers!
I still think Crit should conduct an audit. Adkisson is probably the same as Bob Arnold.
John | Nov 11, 2009 | Reply
Over the past 10 years state employees have recieved no cost of living raise many years. The state only pays on the employees insurance NOT a family plan as most large private employeers. The plans have huge deductibles, large co-pays and no vision or dental coverage. The new state retirement plan is a joke, but necessary since past governors and legislators used the retirement fund like a cookie jar the same as Social Security has been in Washington. “Oh we will pay it back someday”. As a manager I am seeing more stress related illness and wonder when someone is going to crack and start shooting. When it happens it will be the Administration and Legislature who are responsible.
state worker 2 | Nov 17, 2009 | Reply
There are so many good points here about non-merit employees driving up the average it amazes me. I have been working for the state for 9 yrs as an auditor. It took me 5 just to get my salary level back up to the amount I made LANDSCAPING! I make 1/2 to 1/3 of others in similar professions. I only work for the government for stability. The people that say cut the government have no idea how bad it is now. Fewer and fewer workers there are providing the services THEY DEMAND! Most of the agencies I see are close to non-functional now due to cuts. Let those people do without any government services and see how they do.