Oct. 14, 2013 — Local government workers in Clatsop, Josephine and Klamath counties may enroll in the Oregon Educators Benefit Board for health coverage as early as Jan. 1.
The counties are the test markets to expand the health insurance pool for school districts, the result of a new law enacted in the 2013 regular legislative session.
House Bill 2279 opened up OEBB and the Public Employee Benefit Board to local governments as an additional option for their employees, said Joe Baessler, the political coordinator for the Oregon AFSCME union. AFSCME sponsored HB 2279 with Rep. Mitch Greenlick, D-Portland and Rep. Jim Thompson, R-Dallas.
“Josephine County was one of the major reasons we did the bill,” Baessler said. “Individual members will get significantly better plans and pay $250 less.”
Baessler said the savings for Josephine County from switching to OEBB will be enough that the beleaguered county will be able to hire back more staff and possibly even hire a new deputy.
Josephine County’s tax base has been devastated by the decline of the timber industry and the loss of federal subsidies.
Finances are so dire, the Josephine County sheriff’s office dispatch has limited hours from 9 a.m. to 3:30 p.m., and in a case that attracted national media attention, a man broke into an isolated house near Cave Junction and raped his ex-girlfriend after police were unable to respond to her pleas for help.
In May, Josephine County, which includes Grants Pass, voted against an increase in property taxes, which are the state’s lowest.
At the OEBB meeting last week, the board voted to give counties until Nov. 1 to sign up with OEBB to receive coverage in January. Gov. John Kitzhaber will be instructed to appoint two new OEBB board members representing county governments, one from management and one from labor.
Counties, cities and special districts will also be able to join the self-insured Public Employees Benefit Board, but not until 2015. Baessler said local governments are more likely to stick with OEBB, since these governments are more akin to school districts than state employees.
Although a frequent target of animosity from leading Republicans such as Rep. Bruce Hanna of Sutherlin and Senate Minority Leader Ted Ferrioli of John Day, OEBB administrator Joan Kapowich told The Lund Report that after suffering 6 percent inflation in 2011, OEBB’s growth in 2012 was less than 1 percent, and the growth in 2013 was about 3 percent, lower than national and state averages.
Several school districts such as Beaverton have chosen to stay out of OEBB and report receiving better deals outside the system. Others, such as Portland Public Schools, have some bargaining units enrolled in OEBB, but not others.
At a June legislative hearing, Terri Burton of Portland Public Schools lobbied the Legislature to allow the district to opt out of OEBB, saying it offers more cost-effective coverage to employees in its self-insured pool.
Scott Winkels, the League of Oregon Cities lobbyist, also told The Lund Report during the session that none of his members were interested in joining OEBB or PEBB but his organization supported leaving it as an option for cities.
The escalating costs of private health insurance has been a huge source of tension between labor and management for the past decade, with the rate of inflation far exceeding the rise in the consumer price index almost everywhere.
“We don’t fight over wages as much as we fight over healthcare. That’s the biggest cost driver,” Baessler said. “We’re hoping that the first couple of counties will go well [in OEBB], and it’ll look good for others.”
Clatsop County Splits Coverage
In Clatsop County, most county employees will switch from a rich Regence BlueCross BlueShield benefit plan to a high-deductible Regence plan. The deductible will increase $1,000 a year for individual employees, but Clatsop County Human Resources Assistant Susan Farmer said the county would offset that by depositing $1,000 for each employee into a tax-free health-savings account that can be drawn for medical expenses.
With rising costs from Regence’s traditional health plan, many counties have made the switch to high-deductible plans with a health savings account, and Clatsop County is actually a little late in the game, said Public Information Officer Tom Bennett.
He estimated the savings to taxpayers in the Astoria-based county at $600,000 a year.
But members of the county’s largest collective bargaining unit, AFSCME Local 2746, balked at accepting Regence’s high-deductible insurance plan and have instead negotiated with OEBB to receive coverage through Moda Health.
Bennett said Clatsop County budgeted the savings anticipated by the AFSCME unit accepting the high-deductible health plan, and the county may now have to negotiate furlough days with the union, but Baessler said Clatsop County will still receive savings by switching these employees to OEBB compared to the traditional Regence plan.
“The OEBB plans are slightly better and a lot less expensive than their old plan,” Baessler said.
OEBB deputy administrator Denise Hall said the county governments could expand the pool by about 300 members in 2014, and an additional 150 members could be added by 2015.
Baessler said more local governments are ready to make the switch, including Klamath Falls and possibly Multnomah County.