COLUMBIA — South Carolina’s public employees and retirees will pay more for their health care next year after all, despite legislators passing a budget that covered their premium hikes.
The Budget and Control Board voted 3-2 Wednesday to split the cost of the increase between workers and their employers, which include agencies, school districts and public colleges. Both workers and employers will pay 4.6 percent more starting Jan. 1.
The rare, surprise move bucks the 2012-13 fiscal year budget. Critics called it purely political.
Legislators agreed to fully fund the public employees’ premium increase, to ensure they noticed raises in their take-home pay. That called for a 6.37 percent increase in contributions funded by taxpayers.
But Gov. Nikki Haley, Treasurer Curtis Loftis and Comptroller General Richard Eckstrom argued for the split.
“Everyone has to have some skin in the game. It is unfair for us to ask taxpayers to go and pay for the increase in benefits when we can share it,” Haley said afterward. “I think it’s right. I think it’s responsible, and I think it’s what we need to do.”
The two dissenting votes came from the panel’s legislative leaders: House Ways and Means Chairman Brian White and Senate Finance Chairman Hugh Leatherman.
The budget provided public workers their first raise in four years. Furloughs had reduced workers’ pay over the last several years, as layoffs increased their workloads. With more than $1 billion in additional recurring and one-time money coming into state coffers this fiscal year, legislators wanted to provide workers a noticeable raise. They agreed to cover the insurance premiums, while requiring workers to contribute an additional percentage point of their salary toward their retirement benefits.
Haley, a speaker at next month’s Republican National Convention, said she’s making a statement for taxpayers. There is no mechanism for taxpayers to directly benefit.
State Retirees Association president Wayne Bell said he’s stunned by the move that throws the legislative process out the window.
“It’s not because the money’s not there,” he said. “I am bewildered that we will now begin making policy decisions based not on fact. … I believe everybody who took a vote in the affirmative are looking out for their political futures.”
On average, agencies will pay an extra $19 monthly, while employees and retirees will pay $7 more.
Specific amounts by plan – such as for single versus family, level of coverage, and smoker versus non-smoker – are not yet known, according to the newly created Public Employee Benefit Authority.
Currently, employees’ contributions for the standard health plan range from $98 monthly for a single, non-smoker to $367 monthly for full family coverage with a smoker in the household. Employers pay between $292 for single workers to $724 for full families.
The law signed in June that reformed the public pension system put management of employees’ pension and health insurance plans under the new benefit authority. But its board members, which must include four beneficiaries of the systems, still need to be appointed, and state law requires health plans to be approved by mid-August. That gave the Budget and Control Board a last opportunity to make such a change.
Eckstrom said legislators could decide to apply the surplus next fiscal year to unfunded, long-term liabilities in the retirees’ health care premiums.
“State employees are really consumers of health insurance. Consumers naturally expect to pay for what they consume,” Eckstrom said. “I was trying to find a middle ground, a sense of balance and fairness. … Why should non-state employees be asked to pick up the cost?”