Payment stalemate leaves medical benefits in lurch


POSTED: Thursday, March 19, 2009

A federal mediator may be brought in to help break a standoff between labor and management involving 225,000 government workers, retirees and dependents.

The public worker group faces a 29 percent increase in their medical insurance payments with the state and unions divided on who will pick up the $27 million tab.

The state board responsible for setting rates, the Hawaii Employer-Union Employees Health Benefits Trust, has been deadlocked for two meetings, so yesterday, according to EUTF rules, the board voted to call in a mediator.

Board trustees John Radcliffe and George Kahoohanohano questioned the move because a negotiator likely would try to reach a compromise in private meetings. The state's open-government laws prohibit state boards from making decisions in secret.

Marie Laderta, chairwoman and state human resources director, said a negotiator did not have to bring the board to a decision, just to help find a compromise.

But Gov. Linda Lingle said the real decision will be made when she sits down with state public worker unions to negotiate a way out of the state budget crisis.

“;Part of the equation is what plan they adopt and the second part is, depending on the plan, what is the split—what part will we pay and what part will the employees pay?”; Lingle said.

State and county workers, retirees and dependents currently pay 40 percent of the cost of their medical insurance, with the state or county picking up 60 percent.

Hawaii public employees enjoy some of the best medical coverage in the nation, according to EUTF officials, but the cost is soaring. Lingle wants employees to either take less in benefits or pay for a larger percentage of the plan.

The decision she will put before the unions, Lingle said, is “;what this will mean in terms of lost wages and benefits.”; For the state, Lingle, added, she wants “;a certain amount of savings from my labor costs.”;

“;There are only a couple of ways to get those savings, one is wages and the other big one is health benefits,”; Lingle told the Star-Bulletin yesterday.

Laderta said the board, composed of five union and five management representatives, has deadlocked on how to pay the estimated 29 percent increases because neither side wants to give in.

“;We are trying very hard to come up with a plan and to be able to give them a plan that does not take away too much. We have to balance the benefits with the ways to afford all this,”; Laderta said.

Radcliffe warned the board that if an agreement is not reached soon, the state will not be able to convince the insurance providers to extend their contracts. Laderta, however, promised that the contracts will be extended, but warned that if agreement is not reached, public employees may not have the same benefits.

“;The plans will not drop dead; we will do what we need to provide medical coverage on an interim basis,”; Laderta said. “;It may not be the same coverage, but it will not be dropped.”;