FOR IMMEDIATE RELEASE
CONTACT:
Chuck McDonald, 512-708-8655
McDonald Public Relations, Inc.
Gary Anderson, 512-476-2691
Texas Public Employees Association
(AUSTIN) - March 31, 2003 – The cuts in state employee health insurance that are set to take effect May 1, 2003, will erode benefits that employees have already paid for through lower than market salaries, according to the Texas Public Employees Association (TPEA), the state’s leading employee advocacy group.
“State employees have foregone meaningful and regular salary increases over the last 10 years in the state’s attempt to maintain state health care benefits. Unfortunately, benefits have been eroding over the same period. Employees are being hit with the double whammy of inadequate salary increases and decreases in benefits,” said Gary Anderson, TPEA’s executive director.
“When the state’s health care programs’ expenses are increasing at a projected rate of 13 percent per year and cost-of-living expenses are increasing 3 percent per year, the cost of maintaining current benefits can’t be sustained. The reductions in health care benefits that will begin in May, 2003, will be followed up with cuts for the 2004-05 biennium. These cuts will exceed more than a half billion dollars in out-of-pocket expenses to state employees,” said Anderson.
“Although we understand the impossibility of sustaining 13 percent annual increases in health care costs, “ Anderson said. “State employees have already paid for health care benefits by foregoing salary increases over the past decade and now should be compensated to cover these expenses that come directly out of their pockets.”
TPEA has been in negotiations with the legislative leadership in an effort to mitigate the severity of the initial proposals set forth by the Employees Retirement System and the legislature has responded by preserving the 50 percent spouse and dependent coverage benefit critical to state employees and their families. TPEA is working on strategies to help minimize the depth of cuts on current, full-time employees.
Some of the other options proposed by TPEA that are receiving serious consideration include establishing a waiting period for new employees, revisions for part-time employee health care coverage and requiring that benefits revisions that state employees must absorb must also be absorbed by all other groups receiving state-funded healthcare, including non-faculty higher education employees and the newly covered 600,000 public school district employees.
TPEA believes that costs can only be brought under control when each group in the health care system - participants AND providers - experiences equally the impact of the budget crunch. Therefore, TPEA continues to work toward achieving reductions in the reimbursement rates for health care providers.
Employee health care benefits have become an increasingly important part of the states’ ability to attract and retain employees as employee salaries have begun to significantly lag behind other employers. These significant changes in benefits in conjunction with non-competitive salaries will seriously undermine the state’s ability to maintain a stable and competent workforce, Anderson said.
Many in the legislature privately acknowledge the growing concern regarding the state’s ability to maintain services unless compensation becomes competitive.
“It is critical that these significant erosions of health care benefits be replaced in the form of salary as soon as funds are available, “Anderson said. “When the economy turns around, if the state compensation is not competitive with other employers, the core competency of the state workforce will be significantly depleted.”
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