Budget may trim benefits

Local governments reassess generous health plans.

By WILL VAN SANT
Published July 5, 2007

Sick? Get a government job.

Nationwide, private employers have become stingier with health plans, trimming benefits and shifting premium costs to workers.

But that's not true for local government workers in the Tampa Bay area.

A review by the St. Petersburg Times shows that several local governments, including St. Petersburg, Clearwater and Hillsborough County, will actually pay the same or a bigger share of worker health care costs in 2007 than they did five years ago.

Record property tax collections in recent years have fed the largesse. But with a new state law requiring local governments to roll back property tax collections in 2008, some leaders are eyeing health spending as one area to conserve cash.

It won't be easy. Governments have long argued robust benefits, for both health care and retirement, are key to attracting and keeping quality workers. And unions can be expected to strongly resist.

Despite the difficulties, a shift in approach by local governments may be gaining speed due to the new tax climate.

"We have no illusions," said Joe Roseto, Clearwater's human resources director. "These budgetary realities have made us realize we have to control costs, or reduce costs."

Over the last decade, health care expenses have soared for both private companies and government.

Locally, public employees have not been spared. Their annual contributions to their health plans have risen, and they have been asked to pay higher deductibles and copayments.

But governments have used public money, in the form of taxes and fees, to cushion the impact.

This year, counties and large cities in the Tampa Bay area will pay out $135.4-million to subsidize their employees' health benefits and millions more to cover benefits for their retirees.

Hillsborough County will pay $61-million, or 80 percent, of its employees' health benefit costs. In 2002, the county paid 74 percent of the tab.

During that period, the county's cost per employee rose 78 percent to $7,046; for workers, annual benefit costs rose just 24 percent to $1,721.

Hillsborough workers also enjoy what county benefits director Christina Swanson described as a "unique" perk. They pay no deductible for access to care.

Swanson said deductibles would place a burden on county workers, some of whom are low-income, have little access to technology and are primarily Spanish speakers.

"Trying to explain to those people that you need to pay $1,000 out of pocket for the plan to do anything is not something we want to do," she said.

Hillsborough County Commissioner Brian Blair, known as a budget hawk, said it's time to reassess.

"We are getting ready to tighten our belts," he said. "Families do it, private sector companies do it, and government should be no different."

Generous plans

In Clearwater, union contracts require the city to pay 100 percent of employee health plan costs. A worker can add a spouse, child or whole family to the plan and pay a portion of the bill.

But in such cases, the city still picks up 75 percent of costs for a single dependent and 65 percent when a family is enrolled, while still covering the worker's entire tab.

Of the $13.8-million being spent on health care by the city and its workers this year, Clearwater will cover 81 percent, or $11.2-million. Five years ago the figure was 77 percent.

Pasco County, too, pays 100 percent of its employees' health plan bill. However, when workers enroll a spouse, child or family, they must pick up 100 percent of dependent costs.

The majority of Pasco employees decline to enroll dependents. Most opt to have no health care money taken from their paychecks. The plan costs the county $5,831 per worker per year. Five years ago, the figure was $2,886.

"It's generous," said county benefits manager Jane Calano. "Presently the consideration is to continue with the 100 percent. But that is subject to change."

The 100 percent option is also available to Tampa workers who choose to cover themselves only. About 2,000 employees currently go that route. Another 2,250 are on the family plan, which allows a worker to enroll as many dependents as they wish.

The family plan costs $718 a month. Employees pay $214.50, or 30 percent of the total; the city picks up the rest.

This year, Tampa expects to spend $22.8-million on employee health benefits; city workers, $7.8-million.

In St. Petersburg, union contracts require the city to pay 75 percent of employee health plan costs, the same portion as in 2002. This year, the city will pay out $17.3-million to cover its workers and another $2.5-million on benefits for retirees.

City Council member Herb Polson wants to start a discussion about changing the cost-sharing balance, saying the current plan is difficult to defend given the pressure on local government budgets.

He can expect opposition.

"Often what you see with slashing the benefits of workers is that it's the first response to financial stress," said Charles Clark, president of the union that represents city workers. "I think it's appalling. We are not going to sit back. We are going to fight."

Shifting the costs

Pinellas County, whose workers are not unionized, has had success shifting health costs to employees. In 2002, the county picked up 88 percent of the tab. This year, the county will cover 78 percent, spending $23.1-million.

Seeking alternative ways to restrain health spending and a better sense of their place in the market, some in area governments are beginning to do what once would have been unthinkable.

"We haven't compared ourselves on a regular basis with some of the private sector companies," said Gary Cornwell, St. Petersburg's human resources director. "We're starting to look at that now."

Government workers should worry. A 2006 Kaiser Family Foundation survey found that state and local government employees paid 18 percent of the cost to provide health benefits for their families. The figure across all industries -- including private companies and government -- was 26 percent.

Of course, public employees do play a vital and unique role in their communities.

"If that Category 3 hurricane is bearing down on Tampa Bay, that private sector employee can say, 'Well, I'm packing up the wife and kids and going to Orlando,' " said Roseto, Clearwater's human resources chief. "But many of our employees don't have that option."

Staff writers Mike Donila, Aaron Sharockman, Bill Varian and Janet Zink contributed to this report. Will Van Sant can be reached at vansant@sptimes.com or 727 445-4166.

Generous health benefits have long been a perk of government employment. With local governments forced by a new state law to roll back property taxes, some are saying it's time to cut back. Here's the percentage of health plan costs that local governments are paying this year; employees pay the remainder. Workers are responsible for paying plan deductibles and copayments.

Pasco County: 100 percent*

Clearwater: 100 percent**

Tampa: 100 percent***

Hillsborough County: 80 percent

Pinellas County: 78 percent

St. Petersburg: 75 percent

* Pasco pays 100 percent of benefit costs for its workers. If workers want to enroll a spouse or family in the plan, they pay 100 percent of the added cost.

** In Clearwater, when a worker enrolls a spouse or child, the city picks up 75 percent of costs. If the worker enrolls a family, the city covers 65 percent of costs.

*** Tampa workers can add as many dependents as they wish for $214.50 a month, or 30 percent of the total plan fee, which is $718. The city pays the difference.

[Last modified July 4, 2007, 22:12:48]