Capitol - Your Illinois News Radar » AFSCME: Rauner wants “two radical changes” to group insurance
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
To subscribe to Capitol Fax, click here.
AFSCME: Rauner wants “two radical changes” to group insurance

Friday, Jun 19, 2015

* This AFSCME Council 31 handout to members was scanned by a reader and then converted to text. I’ve tried to correct most of the conversion errors. The original document is here

Drastically reducing the group insurance benefit for state employees has been a priority for Governor Rauner since Day 1. Even before contract negotiations got underway, the Governor made cutting the state’s insurance plan a pillar of his budget proposal building $700 million in cuts to the group health plan into his budget. Even though his staff admitted in legislative testimony that changes would have to be negotiated with state employee unions, the governor is now demanding that legislators amend the collective bargaining law to ban negotiations over health care benefits.

At the bargaining table, Rauner is pushing for two radical changes to the group insurance benefit which could increase employee costs by thousands of dollars each year: He is proposing to drastically increase the share of the premium paid by employees and drastically increase the out of pocket costs when employees access healthcare.

Rauner wants to double the employee premium contribution to 40% of the cost for single coverage - and to 40% of the cost for dependent coverage too. By federal law, the cost for single coverage is capped at 9.5% of income. However, there is no cap at all on the premium contribution for dependent coverage. This proposal represents a significant change in a number of ways:

1. Currently employees pay a fixed dollar amount toward premiums that is specified in the contract. Moving to paying a percentage of the premium cost means that employee costs would rise each year based on any increase in the state’s healthcare costs.

2. Currently employees who make less pay a little less for health insurance, and employees that make more pay a little more. This proposal eliminates protections for lower paid workers, as everyone will be paying the same amount for group insurance.

3. Increasing the employee premium contribution from 19% (the current average contribution) to 40% puts Illinois outside the norm of other states. The national average for state employee premium contributions is 16%.

Rauner also wants to lower the insurance plan’s value and institute massive cost shifting onto employees through high out of pocket costs. The Administration is proposing a health plan with a 60% actuarial value. This means that on average, the health plan will pay 60% of allowable health care expenses, with the employee paying 40% of the cost through deductibles, copays and co-insurance.

• The current actuarial value of the Illinois group health plan is 93%. This mirrors state employee group insurance plans in other states. The average state government health plan nationwide had an actuarial value of 92% in 2013; the Midwest average is 93%.

• The Administration’s proposal does not include any specific changes to co-pays, deductibles, etc. Rather, it would delegate a committee to develop the new out of pocket costs based on its demand that employees pay a total of 40% of health care expenditures.

These proposed changes to health benefits would move Illinois from average to dead last when compared to other states.

• The Affordable Care Act (ACA) ranks plans as: platinum (best); gold; silver; bronze (worst). 60% actuarial value equates to “bronze” level coverage under the ACA.

• The average bronze level plan for an individual has a deductible of $5,400 and an out-of­ pocket maximum of $6,350. Bronze level plans would result in staggering and unaffordable cost increases for state employees. These plans have out of pocket costs at or near what is allowable under the ACA:

    o $6,600 for single
    o $13,200 for family

• 96% of states have a group health benefit that equates to an ACA “platinum” plan (valued over 80%).

• Only two states have “gold” level plans (valued at 80%)

• No other state has an employee health insurance plan with an actuarial value as low as 60%

- Posted by Rich Miller        

  1. - Andy S. - Friday, Jun 19, 15 @ 3:56 pm:

    I am at a loss for words to describe this proposal, because they are all banned on this site.

  2. - Liberty - Friday, Jun 19, 15 @ 4:00 pm:

    This is exactly why I voted for a Democrat for the first time.

  3. - Oswego Willy - Friday, Jun 19, 15 @ 4:03 pm:

    Rauner won, now he wants what he wants.

  4. - Demoralized - Friday, Jun 19, 15 @ 4:04 pm:

    Who could afford this? You may as well not have health insurance at all.

  5. - Anonymous - Friday, Jun 19, 15 @ 4:04 pm:

    How would this new proposed plan compare to health insurance plans and contributions typically offered by a private employer?

  6. - Joe cannon - Friday, Jun 19, 15 @ 4:04 pm:

    What a great way to driv out tier 1 employees to permit the hiring of pension relieving tier 2 ones. Or privitizing to nonunion NFPs

  7. - Peoria Guy - Friday, Jun 19, 15 @ 4:05 pm:

    Lord knows we need radical changes if this state is to recover from the mess we are in. I understand nobody wants those changes to touch them. There are no easy answers

  8. - Norseman - Friday, Jun 19, 15 @ 4:05 pm:

    Happy, Father’s Day weekend news. Not really surprised. Rooting for AFSCME to stay firm.

  9. - Politix - Friday, Jun 19, 15 @ 4:05 pm:

    Wonder what the actual cost savings to the state is projected. Is it significant or is this another way to stick it to unions?

    Most expect insurance premiums to increase, but a jump from 19% to 40% is alarming.

  10. - Casual Observer - Friday, Jun 19, 15 @ 4:06 pm:

    And in return he’s offering…? I thought so.

  11. - union employee - Friday, Jun 19, 15 @ 4:07 pm:

    I hope unions will not allow this to happen.

  12. - Cassandra - Friday, Jun 19, 15 @ 4:08 pm:

    Aren’t employee health costs going up in the private employment sector as well (I’m leaving out the freelancers and contract workers, not sure how they are faring, maybe better than before when many if not most couldn’t even get insurance).

    Shouldn’t that be the comparison, not just other government workers. Or is the argument that government workers should be treated differently with respect to health insurance costs. If so, why?

    Anyway, want to solve all this? Single payer for the nation. Put everybody on Medicare. Other developed nations have done it.It’s probably coming here too, but maybe not for a few more decades.

  13. - 1776 - Friday, Jun 19, 15 @ 4:08 pm:

    So the unions think it’s OK to be “average” in the cost for insurance premiums for workers but it’s not OK for employers to be “average” in Work Comp premiums?

  14. - bloval27 - Friday, Jun 19, 15 @ 4:08 pm:

    Wait so is for the State workers this proposal? Or does this also include those who work for AFSCME directly or both? Just curious to know the dynamic of all this.

  15. - Skeptic - Friday, Jun 19, 15 @ 4:09 pm:

    Peoria Guy: If AFSCME employees were the cause of this mess, I might agree with you.

  16. - anon - Friday, Jun 19, 15 @ 4:09 pm:

    The proposed cost shift is unconscionable and clearly unaffordable for the majority of State workers with families. Another example of Mr. Rauner attempting to provoke a strike if impasse is declared.

  17. - Secret Square - Friday, Jun 19, 15 @ 4:11 pm:

    “How would this new proposed plan compare to health insurance plans and contributions typically offered by a private employer?”

    Also, how do these drastic changes compare to those typically made by a private employer when costs go up? Do they ever try to make changes that could or should have been made over several years, or even decades, all at once?

  18. - Demoralized - Friday, Jun 19, 15 @ 4:11 pm:

    The state has given notice that they do not intend to extend the current contract. I would bet anything that come July you’ll start seeing Executive Orders issued to begin to implement things the Governor wants to include in the contract, including this healthcare proposal. AFSCME is going to spend a lot of time and money in court in the near future. Mark my words.

  19. - Politix - Friday, Jun 19, 15 @ 4:12 pm:

    “What a great way to driv out tier 1 employees to permit the hiring of pension relieving tier 2 ones. Or privitizing to nonunion NFPs”

    Ask any Tier 1 with more than 10-15 years in if they are planning to quit. Rauner would like nothing more. Forget it.

  20. - Politix - Friday, Jun 19, 15 @ 4:13 pm:

    “The state has given notice that they do not intend to extend the current contract.”

    They have? I must have missed something.

  21. - Secret Square - Friday, Jun 19, 15 @ 4:14 pm:

    “Wait so is for the State workers this proposal? Or does this also include those who work for AFSCME directly or both?”

    I take it you mean, “Does this proposal affect all state workers or only those who belong to AFSCME?”

    The answer is yes, it affects ALL state workers, union or not — whatever health insurance deal is worked out in the AFSCME contract is applied to everyone. (Unlike the wage provisions, which only apply to those in the respective bargaining units.)

  22. - Anotherretiree - Friday, Jun 19, 15 @ 4:16 pm:

    Still no hint if this affects non Medicare retirees. I suspect it does. If you have medical issues, I suggest you address them now. Unless you want Gov Rauner doing your colonoscopy.

  23. - jimk849 - Friday, Jun 19, 15 @ 4:18 pm:

    This shows how willing Rauner is to negotiate.

  24. - bloval27 - Friday, Jun 19, 15 @ 4:19 pm:

    Ah ok, thanks Secret Square that clears it up.

  25. - Joe cannon - Friday, Jun 19, 15 @ 4:19 pm:

    @politix while being snarky my point remains. Anyone who can retire, with no changes to insurance ( kanerva) will have a huge financial incentive to do so. And yes Rauner would be happy

  26. - Anonymous - Friday, Jun 19, 15 @ 4:22 pm:

    ==Also, how do these drastic changes compare to those typically made by a private employer when costs go up?==

    Yes. The year Obamacare took effect many private employers had to raise employee costs significantly (and employer costs also rose significantly)…or they had to drop coverage completely because it was no longer affordable.

  27. - Georg Sande - Friday, Jun 19, 15 @ 4:22 pm:

    You know, the folks in this space are resoundingly left and often times state government employees. And that’s okay. But most people in the real world — and in the real Illinois — are neither. So maybe, just maybe, some balanced info. would help before reconstituting the “Governor is a Big Meanie” meme.

    We don’t know if previous years’ health costs were subsidized or worse, super-subsidized, by taxpayers. Let’s face it, neither Blago nor Quinn were really negotiating all that much with AFSCME.

    So let’s find out BOTH sides before more Leftist nonsense is dispensed, shall we?

  28. - Liberty - Friday, Jun 19, 15 @ 4:22 pm:

    These costs are dramatically higher than average (not large employer) in the private sector according to the Kaiser Foundation

  29. - Demoralized - Friday, Jun 19, 15 @ 4:25 pm:


    You forgot to use the word socialist in your analysis. Do better next time.

  30. - john - Friday, Jun 19, 15 @ 4:28 pm:

    For those of you mentioning private sector employers; one of the reasons that large public sector employers are compared to each other and not to the private sector is the sheer size of their workforce and retirees covered under the plan. The number of people covered by the plan and the single payor - the State; enables the state to negotiate deep discounts in their plan that most smaller private sector companies could never achieve.

    In Illinois, if you include all state and university employees and retirees we are over 100,000 people. Almost no private employers have that large a workforce inside the United States anymore. Illinois is also a contained healthcare marketplace with just a few markets - another way for the employer to negotiate discounts.

    No private employers are able to offer insurance companies the insured network size and limited area of coverage as large state and local government employers. That is why you compare large public sector employers to each other and not to the private sector.

  31. - ACA insider - Friday, Jun 19, 15 @ 5:03 pm:

    As someone who spent the last 2 years signing people up for Obamacare, and knows the ins and outs, bonuses and mistakes of the law, this gives me the shudders. The ACA was a huge step up for so many people who have been categorically denied health coverage. But it is also mostly unaffordable for low-income workers. And the worst, absolute worst mis-step in the law seems to be incorporated here in Rauners’ demands; unlike the 9.5% affordability provision for employer coverage for the employee themself, there is no provision for what is considered ‘unaffordable’ for dependent coverage. As a result, tons of working people are forced to take their employer insurance for themselves - which might come in *just* under 9.5% of their income - but their spouse’s or kids’ coverage can be 15-20-40% of their income with no exemptions, no subsidies…ultimately no coverage for them. Add insult to injury - then the system assigns them a penalty in their taxes! (which they may be able to waive, *if* you are someone who knows the fine print…) This proposal is in no way sustainable…people will become uninsured. Rauner would be forcing state employees into a high deductible health plan that will ultimately squash them with debt when they get sick.

  32. - Mason born - Monday, Jun 22, 15 @ 8:57 am:

    I posted my last comment right before rich closed comments. My last line should read. Not that I agree with it it’s a terrible idea.

  33. - Cynic - Monday, Jun 22, 15 @ 5:02 pm:

    So this seems to fly in the face of the state Supreme Court’s ruling in Kanerva vs. Weems, a case heard July 2014, that tested whether State employee/retiree health care benefits can be reduced. The justices ruled that the state constitution’s pension protection clause is “aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them.” So how is raising the premiums and deductables to an unaffordable level count as not diminishing promised benefits? Or is this only aimed at current workers leaving the annuitants unaffected? If so get ready for massive retirements.

Sorry, comments for this post are now closed.

* Rauner appoints Dunkin to MWRD
* Reader comments closed for the weekend
* ERA opponents' logic questioned
* Question of the day
* More IDVA shakeup as embattled director quits
* Sanguinetti ties gun issue to Cuban heritage while talking AV
* Stop Illinois Big Coal Bailouts
* After stinging criticism, tronc reportedly calls cops on picketing reporters
* Captains obvious
* Chicago political ad spending almost three times higher than closest national competitor
* Cullerton heard "Laurel"
* Black Caucus claims Rauner paying "lip service" to black vendors
* Bitter infighting continues at troubled SIU
* Peoria paper compares Rauner to Trump - and not in a good way
* Harmon essentially claims Madigan is living in Rauner's head rent-free
* Marion mayor fumes over state response to water shortage
* NRA and Rauner in close step on two bills
* *** UPDATED x1 - Rauner admin responds *** Madigan blames Rauner for Quincy, says members have unanswered questions
* *** LIVE *** Session coverage
* Yesterday's stories

Visit our advertisers...









* Disaster order for 9 S. Illinois counties hit b.....
* Illinois lawmakers vote to let kids take medica.....
* Disaster order for 9 S. Illinois counties hit b.....
* Illinois condemns motorcyclists to death by lea.....
* Disaster order for 9 S. Illinois counties hit b.....

* CTA getting new high-definition cameras for downtown stops
* Police suspect driver who killed pedestrian was drunk
* Wildlife Prairie Park to add 14 new cabins
* Winner of karaoke contest to perform at Illinois State Fair
* U of I performing arts center to mark 50th anniversary
* EXCHANGE: Sensory bags, story times to benefit autistics
* EXCHANGE: Retiring owner hoping to keep radio station local
* Trump nominates Chicago businessman for Belgium ambassador
* East St. Louis police officer who earned $200K put on leave
* Illinois group needs $500K to restore Black Hawk statue

* Illinois GOP chairman re-elected; Republicans display unity
* GoFundMe makes saving Lincoln artifacts modern, accessible
* Gov. Rauner ally Ken Dunkin given $70K Chicago post
* Madigan wants information on governor's Legionnaires' fix
* State lawmaker to SIU president: 'Go to hell, sir'
* Bill permitting medical marijuana use in schools goes to Rauner
* Madigan: Rauner's death penalty proposal to get hearing Monday
* Illinois Senate approves $40,000 minimum salary for teachers
* Justice Charles Freeman announces retirement from Illinois Supreme Court
* Under the Dome Podcast: Death penalty. Guns. ERA. GOP unity.

* Trump taps Ron Gidwitz to be Belgian ambassador
* Art Institute uses data to give visitors what they want
* Crain's wins 4 Chicago journalism awards
* A tougher carjacking law is about crime, not race, says police chief
* Crain's largest publicly traded companies

* Reynaldo Lopez, White Sox win first home series
* Woman, 28, dies weeks after being struck by stray gunfire in Bronzeville
* Attention gardeners: Cover your tomatoes and tulips tonight
* ‘The Originalist’ depicts Antonin Scalia as both mentor and scholar
* Girl, 14, reported missing from Lake Meadows
* One bicyclist killed, another injured in cougar attack near Seattle
* Trump to demand DOJ review claims of FBI spy on campaign
* Police: Boy, 16, shot to death in Lawndale
* Markle gifts royal wedding bouquet to Grave of the Unknown Warrior
* Man shot in back while leaving Washington Park home

* 36 local candidates have been assassinated in Mexico, and the election is still 2 months away
* Trump says he will call for DOJ to probe whether FBI surveilled his campaign for 'political purposes'
* Kyle Schwarber, Javier Baez, Ben Zobrist hit homers as Yu Darvish excels in Cubs' 6-1 win over Reds
* Car crashes into Hammond shop
* Cougar attacks cyclists outside of Seattle, killing 1
* U.S. tops Canada 4-1 to claim bronze at hockey worlds
* Cubs' Anthony Rizzo on slow start to season: 'It's a marathon'
* Teen killed in Lawndale shooting
* Rough week: Robinson Cano first suspended, then former teammate throws him under bus
* U.S., China putting trade war on hold after progress in talks

» The Quandary Behind A Quincy Legionnaires’ Victim’s Death: ‘Where The Heck Was She?’
» State Week: Gun Bills And The Death Penalty, GOP Leadership Fight
» Web Extra, The Week in Review: Biss Endorses Pritzker
» The Week in Review: Obama Presidential Center Gets City’s Approval
» Should The Voting Age Be Lowered?; ‘Hamilton: The Exhibition’; Food As Medicine; Rescuing Tortoises
» Voices Of Chicagoland's Opioid Crisis: Nick Kanehl And Marty Cook
» How To Stop Gun Violence? Just Ask
» #651 John Prine, Opinions on Courtney Barnett & Scott Hutchison
» May 17, 2018 - Full Show
» Obama Presidential Center Clears First Hurdle

* Our View: Another disappointing lack of transparency in Illinois government
* Ralph Martire: Illinois can't afford Rauner's budget 'savings' rhetoric
* BGA: Redistricting reform can't be blocked forever
* Community Foundation for the Land of Lincoln: Forging ahead to serve those who came before us
* Statehouse Insider: Is the happy talk for real?
* Illinois GOP chairman re-elected; Republicans display unity
* GoFundMe makes saving Lincoln artifacts modern, accessible
* Our View: Support legislation that would halt newsprint tariffs
* Guest View: National infrastructure initiative must meet the needs of rural America
* Lisa Madigan: Illinois must continue to invest in vital legal aid organizations

* Decatur-area girls invited to be inspired at Girls World Expo
* Should Illinois townships go away? Legislation would make it easier to do exactly that
* 'God does all the hard work, I just finish it,' Art on the Square's top winner says
* Lutheran Child and Family Services of Illinois relocates Mount Vernon office
* Rend Lake Conservancy District lifts water conservation request
* Road closure: Front St. closed Monday for sewer repairs
* 'The People's Station': WLLULP aims to spread positive Decatur community news
* Illinois 200 | World War II caused dramatic changes to Illinois’ way of life and economy
* PFOP: Short-lived performance hall once city’s finest
* Mother-daughter duo from Royalton share stage at Rend Lake College pinning ceremony

* Images: Montini Catholic High School graduation
* Fire officials: Vehicle rolled off lift, pinned person at Batavia Walmart
* Images: West Aurora High School graduation
* NYU Abu Dhabi blocks journalists from filming John Kerry
* LSU Heisman Trophy winner Billy Cannon dies at age 80

* PPP: Rodney Davis up by only 3, Hultgren a...
* Letter: Let's fix the Trump issue - Northw...
* Blockchain Is 'World-Changing', Says U.S. ...
* Congressional Hearing on UFOs Suggested by...
* How the Public Finance Network will push C...
* Congressional town halls: Old-fashioned an...
* Paulsen initiates bipartisan request on pr...
* Inside the Field: United Leasing & Finance...
* The Latest: Texas church victim attended p...
* This RSS feed URL is deprecated

* Be Transparent When Advertising Drugs, Sen......
* Dems, Trump Admin Find Common Ground: Help......
* Sunday Extra | War with Iran is a bad idea...
* Halpin named to passenger rail commission...
* Figuring out alternatives to prison...

* Donald Trump nominees delayed by more than......
* Halpin named to passenger rail commission...
* Senators urge Trump to combat anti-Semitism...
* Legion legislation a good first step to he......
* Bill would make attack aboard train federa......

* The Beachwood Radio Sports Hour #200: Is Chicago A Great Sports Town? Was Val Kilmer The Greatest Doc Holliday Of All Time? Is Tom Ricketts The Best Chicago Owner Ever? An All-Star Special Edition.
* What’s THIS? Illinois hasn’t paid its health care bill for retired teachers in 17 months. Rauner wants the payments to stop entirely.
* Sunday, bloody Sunday.
* Free Digital Badge Toolkit Helps Students Show Off Their 21st Century Skills
* Why One Professor Prefers Electronic Ink Over Fancy Tablets
* 7 Roles for Artificial Intelligence in Education
* 2018’s Cities with the Most & Least Student Debt
* It’s time to break silos, look at education as a continuum, leaders say
* Connecticut calls its new Cybersecurity Action Plan a ‘call to arms’
* Are Etextbooks Affordable Now? In a bid to gain market share, publishers have slashed the cost of digital textbooks

* Rend Lake Water Conservancy District Water Main Break
* Statement from Gov. Rauner
* IEMA Highlights Emergency Preparedness for People with Access and Functional Needs in May
* IEMA Highlights Role of Volunteers in Disasters
* Governor Rauner activates State Emergency Operations Center in Springfield

* Apple UK site brings back Barclays and PayPal Credit options
* Skip those boring intros on Netflix with your Chromecast
* Huawei Honor 10 in for review
* YouTube Music stuff, OnePlus 6 launch, Surface tablet rumors (MobileTechRoundup show #433)
* Week 20 in review: OnePlus 6, Nokia X6, vivo X21i and Oppo Realme1 are official
* Valerian director Luc Besson accused of rape
* Fintech is disrupting big banks, but here’s what it still needs to learn from them

* Lopez dominates Rangers for 1st win of 2018
* White Sox injury updates: Avisail, Rodon
* Abreu's routine leads to consistent results
* Abreu's routine leads to consistent results
* Most Essential White Sox Vote: Round 1
* Jimenez racks up season-high 4 hits
* Methup X, success! Chisox nip Texas, 5-3

Main Menu
Pundit rankings
Subscriber Content
Blagojevich Trial
Updated Posts

May 2018
April 2018
March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005


RSS Feed 2.0
Comments RSS 2.0

Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller