A new survey from United Benefit Advisors (UBA) reveals some rather unsettling trends in regards to public employee compensation, particularly as they relate to health benefits:
The survey finds that public employer cost per employee increased 22 percent from $7,001 in 2012 to $8,551 in 2013, while employer cost in the private sector increased only 15.8 percent from $5,226 in 2012 to $6,040 in 2013. The portion an employee pays decreased for both during that same time period, but by nearly 30 percent (or $1,025) for a public worker and only 15.7 percent for a private worker. Taxpayers, therefore, assumed an additional $1,681 or 24.28 percent of a public employee's health care cost.
There is even more cause for alarm than just the continued out-of-control spending and subsequent burden on taxpayers that it creates; a tax included in the Affordable Care Act known as the "Cadillac Tax" will impose penalties on plans that exceed $10,200 for individuals and more than $27,500 for families.
Thom Mangan, Chief Executive Officer of United Benefit Advisors, reveals just how bad things could get:
"…the average municipality in Illinois and Massachusetts will pay $5,000 per employee in 2018. By 2020, the penalty for family coverage will skyrocket to $9,202 in Illinois and $19,699 in Massachusetts. Unfortunately, those penalties are passed to taxpayers facing their own health care cost increases."
Unfortunately, it appears that this crisis may get much worse before it gets better.
Robert Fellner is a transparency researcher at NPRI.