More than 2,000 Ramsey County workers have ratified three-year contracts that raise wages a total of 7 percent but make significant changes to health insurance.
Most prominently, the contracts create a different retiree health plan for all employees hired after Jan. 1. The contracts also gradually shift a higher monthly premiums to employees, but actually increase the county contribution toward health insurance for some part-timers.
The final ratification vote took place Thursday.
The new retiree health plan eliminates county-paid retiree health insurance for new hires and replaces it with individual health savings accounts to which employees and the county both contribute, said Tom Burke, business agent for AFSCME Council 5.
Employees will contribute 1 percent of their salary to the Health Care Savings Plan, he said; the county will kick in $500 a year once the employee reaches five years of service, $600 a year after 10 years, and $700 a year after 15 years.
Current plan unsustainable
Currently, only employees hired before 1992 receive fully paid retiree health insurance; employees hired since then qualify only if they work for the county at least 20 years. But the county already has a substantial unfunded liability in the program, Burke said, making additional coverage unsustainable.
“You can’t replace retiree insurance,” Burke said, “but this supplies long-term employees some method of financing their health-care costs.” Workers who stay with the county at least 20 years should be able to accumulate $100,000 in their accounts, he said.
Employees hired since 1992 also will be eligible for the new plan, which Burke said can help employees who don’t expect to stay at the county long enough to put in their 20 years. “Under the new plan, you’ll at least walk away with something.”
Family insurance takes increasingly bigger bite
The contracts also have mixed insurance news for active employees. For individual coverage, the employee’s share of premiums remains at $15 in 2006, then rises modestly to $21 for 2007 and 2008.
Employees will pick up larger shares for family coverage, however: 10 percent of the premium increase in 2006, 25 percent of the increase in 2007, and 30 percent of the increase in 2008. Workers will pay “only” $12.50 a month more in 2006, but projections have them paying at least $400 a month for family coverage in the final year of the contract. “I don’t know how people can afford that,” Burke said, “especially someone making only $13 or $14 an hour.”
The main bright spot on health insurance is for part-timers: For those working between 20 hours and 32 hours a week, the county now will cover two-thirds of the monthly premium. That will be especially helpful to lower-paid employees, Burke said.
The contracts also make language changes that allow workers more flexibility in taking different jobs in the county without losing seniority, create a uniform night differential rate, raise tuition reimbursements workers can receive, and make small improvements in other areas.
The economic parts of the contracts are virtually identical, Burke said, but interest-based bargaining resulted in achieving “a whole bunch of little stuff” in individual contracts “that would probably get lost in regular negotiations.”
Comparisons with Hennepin
The eight contracts – all approved overwhelmingly – cover six AFSCME locals: 8, 151, 707, 1076, 1935 and 2599; they replace agreements that expired Dec. 31. The contracts cover all AFSCME employees at the county except for public defenders and county attorneys, whose negotiations are just getting under way, Burke said.
On the surface, the Ramsey County pay raises don’t stack up with the contract approved a few weeks earlier by AFSCME workers in Hennepin County. That contract provides raises totaling 8 percent over two years for most workers, compared with raises of 7 percent over three years in Ramsey County. AFSCME Local 34 in Hennepin County called it the best contract offer in 17 years.
But Hennepin workers, like state employees, went two years without a pay raise, Burke said. Ramsey workers, however, had three-year contracts in place that locked in raises of 2 percent per year. “So there definitely was some catch-up going on in Hennepin,” he said.
Burke expects that same dynamic to play into the new negotiations for public defenders, who, as the only county employees paid by the state, also have had their pay frozen for two years. “We’re hoping to get some catch up for them,” Burke said.
The Ramsey contracts provide 2 percent raises on March 1, 2006, and March 1, 2007, a 1.5 percent raise on March 1, 2008, then another 1.5 percent raise 4 months later.