Premium Contribution Threat Lingers

Increasing public employee contribution to health care would be pay cut

By Tom Gerhardt, Director of Public Affairs

Budget woes have public employees in the crosshairs as we enter the second half of the legislative session.

It’s crystal clear that pay increases are not on the table for state workers and higher education, but a pay cut could be if legislators ultimately implement Gov. Doug Burgum’s recommendation that public employees contribute 5 percent to their health insurance premiums. Numbers show that would save the state around $11 million in the upcoming biennium. That’s money lawmakers may need to tap into at the end of April.

It’s a good news/bad news situation. The good news is neither the Senate nor the House introduced a bill calling for the 5 percent buy-in. In fact, members of both chambers have gone on the record, saying that neither side has an appetite to put that burden on public employees. That includes Senate Majority Leader Rich Wardner.

Storm clouds over the prairie. (The Enormous Storm Cloud/Kushnirov — stock.adobe.com)

“We will continue to want to pay all of the health insurance, and I mean it’s pretty simple. If you don’t give the people a raise and then you kick them with that they have to pay for 5 percent of their own health insurance? At this point we’re just not going to do it because we do feel that our state employees work hard for us. We’ve got a lot of people that go above and beyond their job to help the state of North Dakota,” Wardner said.

However, Wardner and others were quick to say that anything can happen as the session winds down — especially if money is tight. The March 9 revenue forecast lends reason to believe tough budgetary decisions will have to be made, and the 5 percent health insurance premium buy-in could be introduced.

House Minority Leader Corey Mock says if the 5 percent contribution goes through, and to be clear that’s an “if ” right now, it would equate to a pay cut for public employees.

“It’s likely that co-pays and deductibles will go up to minimize premium increases. Even with these efforts, a 5 percent employee contribution would cost an employee with family health insurance $870 each year to maintain their benefits — all with no increase in compensation,” Mock said.

Mock says another idea has been floated calling for future state employee hires to pitch in.

“Rep. Randy Boehning offered an amendment to require all new hires after June 30, 2017, to pay 5 percent of their health insurance premiums. This amendment was not debated or considered at the time, but the Boehning amendment may re-emerge later in the session as appropriation bills are negotiated,” Mock said.

North Dakota United President Nick Archuleta has said the state needs to look elsewhere to balance the budget, and not on the backs of public employees who provide valuable services for all North Dakotans.

“We don’t look at these as public employee jobs; these are people. And these are people who contribute to our communities, they live among us, they worship where we worship, they send their kids to our schools. Behind every job cut, there is a person and a family and an impact, and we want to tread that line very, very carefully,” Archuleta said.

Senator Wardner also praised state employees, saying, “Just think of the knowledge and the skills and the expertise that they have. There’s a reason this state runs very efficiently. I know some people don’t think so, but it does, believe me.”

The state of North Dakota has paid 100 percent of employee healthcare premiums since the early 1980s, according to North Dakota Public Employee Retirement System (NDPERS) Executive Director Sparb Collins.

Archuleta added that fully paid health insurance helps to recruit and retain public employees.

“The state of North Dakota, the people who live here, have come to expect great public service,” Archuleta said. “I’m afraid that if all we are going to do is cut, cut, cut, we’re not going to be able to maintain that level that the people of North Dakota have come to expect.”

Representative Mock goes back to the 0–0 pay increase for the next biennium, coupled with inflation, as enough to constitute a pay cut for public employees, without even considering the potential contribution to their health-insurance premium. He said he’s working to do all he can to keep public employees “whole” throughout the upcoming biennium.

“North Dakota has an opportunity to be a low-tax, business-friendly state,” Mock said. “But shifting tax burdens and balancing budgets on the backs of our workforce is not the way to do it. We should step forward and take a big-picture look at our priorities, our funding sources and our long-term objectives. We can keep more money in the pockets of North Dakota families if we make smart investments, develop strategic tax policies, and work with all levels of government to live within our means.”