Cost of health insurance keeps rising [Chattanooga Times Free Press, Tenn.]

Dec. 18--Chances are, if you have a full-time job, you're going to pay more for health insurance next year than you did in the past.

On average, Chattanooga employers are shelling out 8 to 12 percent more to provide health insurance for their employees. And more frequently, employers are passing some of that increase to their work force, experts say.

"This has been as tough of a year as I can remember for Jan. 1 renewals," Russ Blakely, a local employee benefits specialist, said. "Employers just can't live with a 10 percent increase in the cost of their health care."

The issue of health benefit costs, and who should pay for them, have kept negotiations between the Hamilton County Education Association and the local school system ongoing for more than 10 months. Progress on the issue -- whether employees need to start paying more in premiums to help offset the district's rising costs -- seemingly has reached a standstill, as the two sides can't seem to reach a compromise.

A negotiation session scheduled for Monday was canceled and has not yet been rescheduled.

Under Hamilton County Schools' current insurance plan, employees pay $25 a month for single coverage and about $261.78 for family coverage. Those rates, and the basic design of the plan, have not changed in about eight years, officials said, when employees started having to pay for their health coverage.

Teachers' association representatives have argued that employees went years without raises in exchange for a rich benefits package.

Mr. Blakely said people who work for nonprofit or government agencies traditionally are willing to trade off lower salaries for a benefits package that is richer and cheaper than those in the private sector. But those days might be over, he said.

"You can't trade a lower pay increase for no change in benefits," he said. "There's more money at stake on the benefits side than the pay side."

A review of health insurance premiums paid by employees of large government employers shows that Hamilton County teachers and employees of Hamilton County pay less than their counterparts in the city of Chattanooga. Hamilton County teachers also pay less than teachers in Georgia, figures show.

A survey of private employers in the Southeast shows workers pay more than employees of public employers in this region.

Education association President Sharon Vandagriff said the cost of health insurance is driven up by the utilization rate of a company's employees. Teachers get sick frequently because they are surrounded day in and day out by germs and viruses, she said, and they shouldn't be financially punished because the nature of their jobs exposes them to more illness than other professions.

"I can tell you that when I was in the classroom, I could count on being sick at least four times a year. Since I've been out of the classroom (as association president), in two-and-a-half years, I've been sick once for two days," she said. "I've been shocked by the fact that I haven't been sick. I thought everybody stayed sick."

There is no question in the mind of Hamilton County Board of Education member Everett Fairchild that school system employees must start paying more for their health insurance.

"It has to change. We cannot go on with this $25 per month," he said.

Board member Jeffrey Wilson agreed, but felt that possibly a compromise was in sight.

"I'm cautiously optimistic that we'll reach an agreement, but I'm somewhat disheartened that it's taken so long," he said.

Despite the fact that no decision has been made on changes to the school system's health insurance, Chief Financial Officer Tommy Kranz said both sides have had "productive dialogue."

"We haven't reached an agreement, but it's not because of a lack of effort on either part," he said. "We're coming at it from different angles. Both sides clearly want to reach a collaborative agreement."

Paul Fronstin, director of the health, research and education program at the Employee Benefit Research Institute in Washington, D.C., said with the rising cost of health care, employers are turning to a more individualized approach to health insurance.

Gone are the days of a one-size-fits-all plan, Mr. Fronstin said. In its place, more companies are turning to wellness and financial incentive programs to put more accountability on their employees.

Mr. Kranz said the district has considered instituting wellness programs, but more drastic measures, such as switching to a high-deductible health plan such as some employers have adopted, is too drastic a measure for now.

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