Governments may push workers to health exchange

Washington becomes first state to consider the cost-shifting plan

OLYMPIA, Wash. — In a quest to save money, political leaders in Washington state are exploring a proposal that would shift some government workers out of their health plans and onto the insurance exchange developed under President Barack Obama's health care law.

Lawmakers believe the change, which could affect thousands of part-time state employees and education workers, would save the state $120 million over the next two years. It would consequently push more health care costs onto the federal government because many of the low-income workers likely would qualify for federal subsidies.

Officials: Oregon will not shift workers to exchange

SALEM — Oregon's top legislative budget officials say they haven't seriously discussed dropping health insurance coverage for part-time state workers to shift some of their costs to the federal government.

Political leaders in Washington state are exploring a plan that would shift some government workers off of their existing health plans and onto the insurance exchange developed under the health care law championed by President Barack Obama.

Oregon Sen. Richard Devlin and Rep. Peter Buckley, co-chairmen of the Legislature's budget committee, say no similar plan is being considered in Salem.

The Washington state plan would save money for the state government, but threatens to affect the federal budget and the pocketbooks of some part-time workers.

— The Associated Press

Washington state appears to be the first major government to seriously explore the possibility of pushing public employees into the exchange, but it probably won't be the last. Rick Johnson, who advises state and local governments on health care policy at the New York-based consulting firm Segal Co., said he expects it will be an option some state and local governments will explore in the years to come.

A spokeswoman with the Department of Health and Human Services declined comment.

Because the federal law requires employers to provide coverage for those working at least 30 hours a week, states are exploring various ways to manage their part-time employees.

Virginia, for example, is requiring all part-time employees to work fewer than 30 hours, which will help the state avoid penalties for not providing health coverage. Florida is facing a potential $300 million penalty for not covering workers who are on duty 30 to 39 hours a week, so it's moving to extend coverage to those employees.

Washington state is in a less common situation because it already provides coverage for part-timers down to 20 hours a week.

The Washington proposal has been advanced as a way to help deal with a $1.2 billion budget shortfall. Under it, Washington state would make policy changes and secure agreements in which staffers who work between 20 and 30 hours a week would get extra compensation but lose their existing health coverage. They would then be eligible to get health care in the federal plan, without any consequence for the state.

While Democratic lawmakers have expressed concern about the Washington state plan this year, it is drawing growing interest with a bipartisan group of political leaders in the state.

Democratic Gov. Jay Inslee, who supported the Obama health care law while in Congress, has reservations about the plan but also said federal rules don't dictate how employers and employees should handle insurance coverage. Inslee indicated that he may consider supporting the idea in the future. "It's one of those ideas that's premature for us to launch this year, but I don't think we should take it off the table," Inslee said Tuesday.

Supporters of the plan say the proposal could help some part-time workers financially and could put them in a position to have better health care benefits. Lawmakers also see it as a boon for the state budget.

"I think it's a great way to fully take advantage of the Affordable Care Act," said Republican Sen. Andy Hill, one of the state's top budget writers.

K-12 workers would have to adopt new bargaining agreements to implement the change, although the state would help by offering sweeteners that would be equivalent to as much as a $2 per hour raise.

Rick Chisa, political director at the Public School Employees of Washington, said the union is open to shifting some workers to the exchange. But Chisa didn't feel the proposal — an inducement valued at perhaps $200 a month for someone working 25 hours a week — provided an adequate incentive, especially if it may be taxed as compensation. He said the change might make sense for cafeteria workers and teacher's assistants who are on the low end of the pay spectrum. But union leaders also want to see what the insurance product looks like in the exchange before making that move. "We want to make sure that we're not selling workers short and being mesmerized by a shiny $2 bill," Chisa said. He said it was "very unlikely" for such a shift to happen this year.

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