Health insurance cost containment bill heads to House for vote
Wednesday, June 5, 2019
OSBA has joined with public worker and educator unions to support a health insurance cost containment bill.
“Don’t get to do that very often,” OSBA Legislative Services Director Lori Sattenspiel told legislators Monday.
House Bill 2266 would reinstate the right of public workers’ spouses and dependents who also work for public agencies to be double-covered under the Public Employees' Benefit Board and the Oregon Educators Benefit Board or to opt out and receive compensation. The opt-out provision saves school districts money because it costs less than the insurance premiums.
The House Rules Committee passed the bill Tuesday, and it is scheduled for a House vote Thursday.
The bill repeals some changes in a 2017 health insurance cost containment law that goes into effect in July. The 2017 law blocked double coverage and opt-outs.
“There were some unintended consequences,” House Speaker Tina Kotek told the House Rules Committee on Monday.
According to Kotek, the double-coverage rule did little other than shift costs around for the agencies. The overall 2017 law will save PEBB and OEBB $149 million, which would not be affected by HB 2266’s changes, she said.
HB 2266 would also allow employers to impose surcharges on double coverage to discourage workers from carrying two plans.
Service Employees International Union and Oregon Education Association representatives explained Monday that the 2017 law created a fairness issue as well as hardship for some workers. Private industry workers can have supplemental coverage, which is especially important to families with high-cost medical needs.
Jared Mason-Gere, OEA government relations consultant, explained to legislators that workers and employers benefit from the double-coverage and opt-out option. Workers who don’t take the double coverage can receive opt-out payments that boost income, and employers can offer better compensation packages while still saving money.
“I will call it a cost containment bill,” Sattenspiel told the committee.
The savings depend on the collective bargaining agreements of individual districts and the workforce makeup, according to Sattenspiel, but for some districts it can mean hundreds of thousands of dollars.
She offered examples such as the Lake County Education Service District, where half the employees opt out, and Grants Pass School District, which has an estimated 60 affected employees. Sattenspiel said districts had bargained creative opt-out agreements, ranging from redirecting money into other benefits to cash payments, and schools use the cost savings for classrooms, teachers and programs.
Tillamook School District Finance Director Shannon Farrier said HB 2266 would prevent her district’s costs from increasing more than $290,000 a year.
“The biggest cost for any district is your people and their benefits,” she said. “Anything that affects that is a big hit for the district.”
Farrier said the district would have a lot of trouble with staffing if HB 2266 doesn’t pass. The double-coverage provision would affect at least 26 employees, some of whom would leave the district without the much-needed opt-out payments, she said.