AFSCME proposes slidingscale health insurance system

It is introducing the measure to aid its workers with the burden of rapidly increasing health-care costs.

Matt Graham

University workers have felt the pinch of rising health-care costs in recent years.

A survey put together by the American Federation of State, County and Municipal Employees Council 5 details stories from members trying to afford health care while taking care of their families, homes and possessions. Many said they couldn’t live with the low wages and high health-care costs.

To alleviate the strain placed on its workers by rapidly increasing health-care costs, AFSCME has proposed a sliding-scale insurance package in negotiations for a new contract. University officials began working on the terms of a new agreement in late June.

The union is also proposing a return to 100 percent single coverage and 90 percent dependant coverage, which members had prior to the last round of negotiations, as opposed to the current setup of 90 percent single coverage and 85 percent dependent coverage.

The package, which would feature “wage-based premiums,” is a progressive system designed to aid all University workers making less than $60,000 by compensating them for high costs, with lower-paid workers receiving higher-percentage wage adjustments.

Less than 1 percent of AFSCME employees earn more than $60,000, according to union figures.

Gladys McKenzie, chief negotiator for AFSCME Council 5, said a progressive system is necessary because workers at the bottom end of the wage scale suffer more than workers at the top under the current system, in which all employees are eligible for a 3 percent wage adjustment.

McKenzie said it is unfair that a worker making $20,000 a year would get a 3 percent adjustment, equivalent to a $600 bonus, while a 3 percent wage adjustment for a $100,000 a year worker, who could more easily afford health care, would equal $3,000.

“Our members have shouldered a disproportionate share of the pain,” she said.

But Morris Kleiner, the AFL-CIO professor of labor policy at the Humphrey Institute of Public Affairs, said a sliding-scale health insurance system based on wages would be “very unusual,” and could make it more difficult for the University to attract top teaching talent because it would shift an increased load to workers making more than $60,000. That result would run against the University’s goal of becoming a top three public research institution, Kleiner said.

AFSCME union members are not alone in struggling to pay for health care. The last several years have seen nationwide health-care costs increase far faster than the rate of inflation.

Kleiner attributes the rapidly rising costs to new technology developments, which require large amounts of capital, and an increased demand for health care, both because of an aging population and increases in quality of care.

“I think individuals who in the past may not have used health care now are using greater amounts because the quality’s improved, and that’s led to an increase in price,” he said.

Dann Chapman, director of employee benefits, said he could not discuss specifics of the University’s proposed plan, but said it only reluctantly passes increased costs onto employees and is working to curb future costs.

But because employers tend to budget their total compensation increases for employees at the rate of inflation, health-care costs rising at rates beyond inflation force employers to take away from yearly wage increases to pay for health care.

This often causes a difference of opinion between employers and employees about the fairness of compensation increases, Kleiner said.

When employees demand compensation for missed increases after taking a four-year wage freeze, as AFSCME is doing, this difference of opinion can be particularly divisive.

And while Carol Carrier, vice president of Human Resources, said the University remains positive that negotiations can be finished before the school year, the union is decidedly less upbeat.

“We’re not seeing the kind of progress we’d like to see at all,” McKenzie said.