For today I thought it would be a good idea to share with you some hard evidence backing up our claims that Sierra Madre has some of the highest municipal employee health insurance costs in the state. We don't know if they are the absolute highest in California, but having spent some considerable time researching this on the Transparent California.com website (link) it is possible to believe that the answer is yes, they are.
The municipal health care plan outside of Sierra Madre that comes closest is the one offered by the City of Beverly Hills to its City Manager. The number there is $31,000. As you will see by examining the chart below we have five employees exceeding that lofty amount. You can only imagine what you get with that much health insurance.
Robert Fellner, a researcher at Transparent California.com and the provider of much of the information we are sharing with you today, wrote about the consequences of such badly overinflated municipal employee health plan costs on the NPRI website.
Health benefits cost 40% more for government workers than for private workers (link): 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.
You will notice that the health care cost numbers provided as unfortunate examples in Robert's article are far less than what Sierra Madre is currently paying. And as a city with health care plan numbers that high, we are assured of being charged that $5,000 per employee "Cadillac Tax" in four years. It will be a significant hit.
Then there is this. Perhaps the reason why the costs of health plans for Sierra Madre municipal employees are so high is because the UUT is so high. There is just so much money available at City Hall that spending some of it on $30K health plans is actually possible.
Here is a breakdown of Sierra Madre's health care plan numbers. If you click on this chart it will enlarge. We have highlighted some of the larger amounts. Take special notice of the $37,815 health care plan being provided to our Water Superintendent. It could very well be the most expensive of its kind in the State of California.
And now that you know, we'll keep digging.