Health benefits for Iowa public employees up in air

By Erin Murphy, Gazette-Lee Des Moines Bureau

DES MOINES - The one thing state troopers, teachers and workers at correctional and mental health facilities have in common is that they all are public employees.

If Gov. Terry Branstad gets his way, they will have something else in common: a single health insurance program.

It's commonly called a master contract, and it's one of the changes Republicans, with their newfound control of the state's lawmaking process, are considering - along with perhaps larger changes in how or if public employees can collectively bargain for their wages and benefits.

Representatives of some of those public employees say such a one-size-fits-all approach would have an adverse effect on employees and employers alike.

Branstad signaled his desire for a master health insurance contract shortly after the Nov. 8 election that resulted in Republican control of the governor's office and the Iowa House and Senate for the first time in two decades.

Not long after the votes were counted, his administration withheld health insurance proposals during collective bargaining sessions with the state's public employee unions. Administration officials said state lawmakers may change the collective bargaining process this year, altering how health insurance plans are negotiated.

Branstad said he thinks a streamlined master contract would provide savings for taxpayers and also help smaller public employers, such as school districts, better withstand health care costs.

Branstad regularly cites the example of a small employer experiencing an increase in expenses because one employee has significant health needs. He compares a master health contract with the state's public employees retirement fund - which is standard for all.

'We can save a lot of money and provide quality insurance coverage for all the employees and do it in a way that both protects the health insurance and the coverage, but at the same time reduces the cost dramatically at a time when we have some significant budget issues,” he said. 'If you can have one big master contract spread that risk ... that can be substantial savings.”

But leaders of two organizations that represent tens of thousands of Iowa public employees say a master contract would have the opposite effect. They say removing the ability for employers to customize their health insurance contracts to their respective needs would be counterproductive.

'We bargain the total package, and then we sit down with our school board and then try to best figure out where we can divide that money up,” said Tammy Wawro, president of the Iowa State Education Association, which negotiates more than 300 contracts for teachers. 'Some districts have chosen to put that money in a good insurance plan. ... Others have said, ‘We're going to put that in salaries.'”

For example, Wawro said, Cedar Rapids schools have insurance plans with high premium costs but the district attempts to make up for that by offering more in salary. The smaller school district in Ogden, Wawro said, has a health insurance package with extensive coverage but sacrifices in salary.

'If you know you're going to have a good family (insurance) plan, that's something that brings people to a small community or a rural community,” Wawro said. 'That's important to people.”

Danny Homan said the union over which he presides, which represents 40,000 Iowa public employees in law enforcement, corrections, mental health care and other fields, negotiates roughly 160 contracts.

He said each contract is tailored to the health care coverage desired by the employees in that area and that customization would be eliminated by a statewide master contract, which he said would be 'devastating.”

'Each and every one of those contracts has unique health insurance provisions that have been mutually agreed to by the employer and the union over a number of years of bargaining. There could be little quirks in there that are unique to that employer and that group of employees,” Homan said. 'So now you're going to have to come up with a plan that addresses or just flat out ignores all those unique circumstances.”

Homan and Wawro said a statewide master contract also could harm local businesses because current contracts often stipulate the insurance be purchased through local companies.

Homan also expressed concern that a master contract could include the state requiring public employees to contribute more to their health insurance plans, which Branstad has proposed in past collective bargaining negotiations but was rejected by an independent arbitrator.

Homan said public employees often negotiate for lower out-of-pocket premiums at the expense of salary increases, and increasing premiums without a corresponding increase in salary would take money out of the employees' pockets and thus the local economies.

He also noted a statewide premium increase would disproportionately affect some public employees; for example, he said a $200-per-month premium increase would be felt more by a clerk than a county attorney.

Iowa Rep. Mark Smith, D-Marshalltown, said Democrats in the Iowa House plan to oppose Republicans' efforts to change the state's collective bargaining laws. But with their majorities in the House and Senate, Republicans do not need any Democrats' approval to pass legislation, assuming at least 51 of 59 House Republicans and 26 of 29 Senate Republicans support any given proposal.

'The current collective bargaining system, we tried to expand it when we were in charge (from 2007 to 2010), and a number of Republican legislators said at that time that the current law was working well,” Smith said. 'The current law is working well. And I want us to keep the current law.”