Health benefits cost 40% more for government workers than for private workers

Business & Entrepreneurs

| January 27, 2014

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.

Robert Fellner

Robert Fellner joined the Nevada Policy in December 2013. Robert has written extensively on the issue of transparency in government. He has also developed and directed Nevada Policy’s public-interest litigation strategy, which led to two landmark victories before the Nevada Supreme Court. The first resulted in a decision that expanded the public’s right to access government records, while the second led to expanded taxpayer standing for constitutional challenges in Nevada. An expert on government compensation and its impact on taxes, Robert has authored multiple studies on public pay and pensions. He has been published in Business Insider, Forbes.com, the Las Vegas Review-Journal, the Los Angeles Times, the Orange County Register, RealClearPolicy.com, the San Diego Union-Tribune, the Wall Street Journal, the Washington Examiner, ZeroHedge.com and elsewhere. Robert has lived in Las Vegas since 2005 when he moved to Nevada to become a professional poker player. Robert has had a remarkably successfully poker career including two top 10 World Series of Poker finishes and being ranked #1 in the world at 10/20 Pot-Limit Omaha cash games. Additionally, his economic analysis on the minimum wage won first place in a 2011 George Mason University essay contest. He also independently organized a successful grassroots media and fundraising effort for a 2012 presidential candidate, before joining the campaign in an official capacity.