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February 2017 Policy Study, Number 17-4


Iowa's Privileged Class: State-Government Employees


It's not Just the Pay Gap. It's the Benefits, too!



While the Pay Gap is based only on wages, many state-government employees also receive a very generous benefits package.  One of the more substantial aspects of those benefits is the extremely low amount those employees contribute toward their health insurance premiums.  Prior to 2016, many state-government employees paid nothing ($0) toward their health insurance premiums.  Beginning on January 1, 2016, after negotiations pushed by Governor Branstad, those employees must contribute $20 per month, or $240 per year, toward their health insurance premiums. The following is the language regarding cost of health benefits from the current contract between the State of Iowa and AFSCME:


Effective January 1, 2016, the State further agrees to contribute to the cost of health benefits in accordance with the following provisions: 1. Single Plans: In each year of this Agreement, the Employee shall contribute twenty dollars ($20.00) a month toward any plan and coverage level selected. The State agrees to contribute the remaining portion of the premium for the single plan and coverage level selected. 2. Family Plans: In each year of this Agreement, the State’s monthly contribution to all family plans shall be eighty-five percent (85%) of the Iowa Select total family premium. Employees may apply this dollar amount to the plan of their choice. In each year of this Agreement, the Employee shall contribute a minimum of twenty dollars ($20.00) a month toward any plan and coverage level selected, if the eighty-five percent (85%) of the Iowa Select does not require the employee to make an additional contribution.[19]


Paying $240 per year for health insurance premiums is quite low when compared to average premiums for those in the private sector.  According to the “2016 Iowa Employer Benefits Study©,” the eighteenth annual study conducted by David P. Lind Benchmark of Clive, an employee benefits research firm:


The combined average annual premiums for all types of medical plans offered by Iowa employers (HMO, PPO, Traditional Indemnity and Consumer-Driven Health Plans) were $6,509 (up 5.9% from 2015) for employee-only coverage and $15,743 (up 0.5%) for employees who include family members. Since 1999, the year this study began, the single premium has increased by 215 percent while the family premium has increased by 186 percent.[20]


The percent of the employer’s contribution, the State of Iowa in the case of state-government workers, is also higher than the national average.  According to an article in The Des Moines Register:


Nationally, federal Bureau of Labor Statistics show that in 2015, all government and private-sector employers contributed on average 80 percent of the cost of health care premiums for single coverage and 69 percent towards family coverage.


But in Iowa, state government's contribution in 2015 for state employees was estimated at 99.4 percent for single coverage and 97.6 percent for family coverage.[21]


At least state-government employees are now contributing something toward their health insurance premiums, but they are still receiving a heck of a deal compared to the average private-sector worker.




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