On May 2nd, I will personally become acquainted with our President's failed promise that under his health care reform law, we could keep our current insurance if we wanted to. On that day, our union will begin negotiating a new collective bargaining agreement with management to replace the contract that will end on June 30th. First order of business on May 2nd will be a presentation on health insurance. Even now, many of our senior members are choosing to retire under the current agreement, rather than take a chance on what our health care benefit will look like on July 1st.
My employer has been self-insured for the vast majority of health care expenditures for many years now. There are two primary exceptions to this. One, they pay a third party insurance carrier for a catastrophic coverage plan for its employees and two, our insurance coverage has a lifetime benefit maximum. On average, less that 1% of employee's health care expenses meet the catastrophic limit each year and as far as I know, none have ever met the lifetime cap.
Over the life of the current five year contract, the cost of our health care plan has averaged a yearly increase in the low single digits with a cumulative increase under 10% over the last four years. Both management and our union have worked to keep expenses low. Part of that plan was having our union members cover a greater portion of the health care costs. Under the previous contract, employees paid less than 20% of expenses, but in the most recent year, employees paid just under 30% of the total cost of the insurance plan.
Additionally, management began offering certain preventative care provisions free of charge to employees. As they examined the data, the company realized that less than 5% of covered employees would use over a third of the health care dollars spent each year. It was cheaper to treat and find issues early rather than wait until they became health problems.
Despite the inherent faults in the health care system, my employer, working with my union brothers and sisters had found a way forward to bring what were formerly 15 - 20% yearly increases and created a sustainable program that worked well. Negotiations for this next contract brought hope that any wage increases would do more than simply pay for the additional health insurance costs. That, of course, is now out the window.
