DES MOINES – Gov. Terry Branstad reiterated his call Monday for state legislators to lead by example and pay 20 percent of the cost of their state health insurance premiums.
The governor said some lawmakers have followed the action he and Lt. Gov. Kim Reynolds took last summer to voluntarily pay a share of their monthly state health insurance coverage, but he believes having all elected officials and their employees pay 20 percent of the premiums would help the overall effort to make Iowa the healthiest state in the nation.
“We think it makes sense for the Legislature and others to do the same thing. So that’s something we’d like to work out with the Legislature,” Branstad told reporters. “I think it’s time they lead instead of follow.”
Senate Majority Leader Mike Gronstal, D-Council Bluffs, said he did not expect the Senate to consider Branstad’s suggestion, noting “we have always treated ourselves consistently with how we treated other state employees.”
Branstad made the remarks while commenting on an arbitrator’s ruling in which Iowa’s largest state employees’ union prevailed in keeping a benefit for the next two years whereby most American Federation of State, County and Municipal Employees (AFSCME) members will receive health insurance at no cost.
Under the ruling, the roughly 20,000 AFSCME members will not get a uniform wage increase for the next two fiscal years, but some will receive automatic “step” increases of 4.5 percent annually and most will not have to pay health insurance premiums in the new two-year labor agreement.
AFSCME officials said their members have foregone wage increases and made other concessions over the years to preserve their health-care benefit, but Branstad said Iowa is one of only six states have do not require all state workers to pay a share of their health insurance premiums while federal employees pay 25 percent and private-sector employees also pay a share.
“We think Iowa is out of step with the rest of the country,” the governor said.
“I think you’ve got to look at trends here,” he added. “This is a much different situation and they can only hold on so long to the past. The 1970s-style plan where the employer pays everything in the private sector has been long since gone. It’s gone in most other states, it’s gone at the federal level and so I think it’s just a matter of time where we’re going to win on this issue. The public is with us on this issue and Iowans want to be healthier.”
Branstad, who put no new money in his fiscal 2014 or 2015 budget proposals to fund increases in state employee salaries or benefits, said administration officials are assessing how best to treat noncontract state workers in a fair and equitable manner given the different outcomes in union contract talks.
Earlier this year, state negotiators reached a voluntary agreement with the State Police Officers Council (SPOC) bargaining unit on a new two-year labor pact that calls for the roughly 600 members to pay more of their health insurance costs and provides for one-time base salary increases totaling 1.5 percent for each of the next two fiscal years running from July 1, 2013, through June 30, 2015.
Under that ratified agreement, all members of the SPOC bargaining unit will pay 20 percent of their health insurance premiums, but those participating in a wellness program could lower their insurance rates through financial incentives.
Branstad said he expected negotiations would take place with both legislative chambers on how to proceed on the employee salaries and benefits issue. He noted in recent years state agencies were required to “eat” the cost of wage/benefit increases within each department’s budget.
State Auditor David Vaudt told reporters Monday the practice of not funding state employee increases in salaries and benefits has spanned four years and may be reaching a point where agencies are having trouble creating any more efficiencies to avoid furloughs, leaving positions unfilled and taking other steps that might negatively impact services or programs.
“I think we have to be very careful not to take that out too far,” Vaudt said.
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