WOW! In my last report, I had predicted that the Protected Fund Reserve would end 2014 with close to $30 million (up from its original $25 million in funding in 2012). While that would have been an excellent outcome, I am pleased to report that the results are even better than expected.
- In 2014, the Protected Fund Reserve increased by $9 million to over $35 million. This represents a 34% increase in our safety net to protect against rising health and welfare costs.
- The new projections show that the Protected Fund Reserve will increase another $3 million this year, and at the end of 2016, the reserve is projected to close in on $40 million. Therefore, the experts at Mercer are now projecting that the Fund for the JLMIC unions will be stable through 2018!
What does this mean?
- No employee premium share for the foreseeable future, and no reason to make changes to the core plan provisions: deductibles, co-insurance and out-of-pocket maximums. This does not mean that we should stop making targeted changes to ensure effective and responsible spending for the medical and pharmacy benefits.
- The spouse benefit access fee, which at $75, is still far lower than benchmarks. In fact, when we raised it from $50 to $75, we saw an increase in participation.
- Emergency room use is higher than at other employers, and the evidence shows that visits to the emergency room do not result in quality care.
- Increasing the use of generic medications results in substantial savings to the plan.
Making changes like these have a direct positive impact on our protected fund, and as a new Co-Chair on the JMLIC Union team (with Dustin Frederick), I intend to continue to lead our group to make responsible changes that help protect our future.
What about the Cadillac tax (the excise tax under the Affordable Care Act)?
Mercer predicts that there will be no impact until 2020, and that prediction is based on very negative/conservative assumptions. More good news for our plan.
Do you ever wonder if you get any benefit from being a Union member?
When it comes to health care benefits, there can be no doubt: King County is 83% unionized and its health care benefits are better than every benchmark – better than Seattle employers with more than 500 employees, national employers with more than 500 employees and other County employers. And, the benefits are better in every respect: no premium share when every other benchmark has substantial premium share, and much lower deductible and out of pocket maximums than any other benchmark.
Is it really the Union representation that accomplished this result?
Yes. A coalition of Unions at King County work hard to insist that these plans remain strong and that employee cost-share is minimized.
As your Teamster representative on the JLMIC, I plan to write a regular column as we move forward into the negotiations for the next Memorandum of Understanding for 2017 and beyond.
If you have questions, please feel free to comment below. Or you can send me an email.
NEXT MONTH: WHAT NOW? SHOULD WE MAKE ANY CHANGES THIS YEAR?