Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
Jan. 31--Milwaukee County supervisors Thursday emphatically shot down a request for a staff report on the potential for savings if the county dropped its employee health insurance and instead encouraged workers to obtain their own coverage under provisions of the new federal health care law.
In calling for the study, Supervisor Deanna Alexander noted the county faces a long-term funding gap and a looming crisis in transportation funding. She said the county could save up to $103.5 million in health insurance costs if it stopped providing health insurance and paid the $2,000 per employee penalty that would be assessed under the Patient Protection and Affordable Care Act.
Employees could get their own insurance through exchanges required under the law, where costs might be cheaper, Alexander's proposal said. Larger risk pools and subsidized premiums for families with up to $88,200 in income available under the law make the study of the shift worthwhile, Alexander said.
The county's federal penalty for not providing health insurance to its 4,400 employees would come to about $7.1 million, a small fraction of the $110.6 million the county has budgeted for health care this year. Some portion of the savings might be available to "support other health programs," Alexander said.
While a work group of county officials may study the issue of potential impacts of the federal health law -- often called Obamacare -- it would help to require a timely review so the county can make a decision before 2014, when more provisions of the law kick in, Alexander said.
"There's no way I'm voting for that," said Supervisor Theo Lipscomb. He called the proposal a "sham" and said the savings claims were based on denying employees health benefits. Doing that would violate the spirit if not the letter of the new federal law, said Lipscomb.
Other supervisors faulted Alexander for not briefing supervisors in advance and called her study proposal premature.
The County Board's finance committee voted 8-1 for an indefinite delay on the issue. Alexander said that likely kills it, though the county work group on health insurance is expected to review the impact of Obamacare on the county without the mandate.
Matt Hanchek, the county's employee benefits manager, said it might be worthwhile for the county to consider "steering some people to the exchanges, perhaps with some county support."
He said he wasn't endorsing the shift, but that it was "absolutely appropriate and prudent to study it," Hanchek said.
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