Insurance costs outpace Georgia workers' pay

Insurance costs outpace Georgia workers' pay

June 25th, 2012 by Tim Omarzu in News

Tamara Reel browses through books at the Rossville Public Library. Reel was visiting the library with her son, Jeremy, to play on the computers and check out a few books.

Photo by Ashlee Culverhouse /Times Free Press.

It's not news that health insurance costs keep increasing.

But over the next few years, the price Georgia schools and libraries pay toward part-time employees' state insurance will skyrocket so high it will exceed some employees' pay.

For example, the Cherokee Regional Library System in Walker and Dade counties had been paying $1,624 annually toward the insurance of a 20-hour-per-week employee earning $8.50 an hour. As of this week, that shot up to $743 a month, or $8,916 annually, a 549 percent increase -- and more than the employee earns.

Consequently, the library system has laid off three workers and cut back five others' hours so they no longer have health insurance.

In two years, Georgia libraries' local match will increase even more, to $912 per month per part-time employee.

"It's going to kill us in the library world. Absolutely kill us. We're going to be laying people off," said Steve Schaefer, director of the Uncle Remus Regional Library System in Madison, Ga.

School districts are bracing for big hikes, too. The cost of state health insurance is due to soar in 2014 to $746 per month per employee for part-time school workers such as bus drivers and paraprofessionals.

"That's more than some of our lower-paid staff make," Dalton Public Schools Superintendent Jim Hawkins said.

Dade County Schools Superintendent James Tobin doesn't mince words when expressing his opinion of the Georgia Board of Community Health's vote on May 10 to increase the cost of insurance for part-time school workers.

"It was totally stupid," Tobin said. "We're going to pay more for noncertified people than they earn. Bus drivers. Secretaries. You will see a lot of school systems that are starting to outsource."

Schools weren't hit as hard as libraries were, initially. Starting this week, the cost increased to $446 per employee per month as opposed to the previous cost of roughly 20 percent of an employee's pay. The per-employee cost will increase to $596 a month in July 2013 and then to $746 a month in July 2014.

The state designed the increased contributions to the public school employees' health insurance plan to make sure employers' contributions equal 75 percent of the plan's cost, according to Pamela A. Keene, spokeswoman for the Georgia Department of Community Health.

"Late last year, the state faced an $815 million projected deficit," Keene wrote in an email. "Through a number of design and billing changes ... the Georgia Department of Community Health was able to reduce this projected deficit by $750 million."

The switch from making schools' and libraries' contribution a percentage of payroll to a monthly dollar amount per part-time employee also is "designed to increase the efficiency and accuracy of collecting contributions," Keene wrote.

But Joe Forsee, director of the Dalton-based Northwest Georgia Regional Library System, expects that contributions to the health insurance fund will decrease. He predicts libraries around the state will cut employees' hours so they're under 171/2 hours a week -- the threshold at which the sky-high insurance rates kick in.

"We're going to have more people lose benefits," Forsee said. "I don't think they spent a lot of time thinking this through."

Schaefer of the Uncle Remus system contacted every library system in the state and compiled a spreadsheet showing that the rate hike will cost Georgia's libraries $2.8 million annually.

Unlike Georgia schools, which can take the unpopular step of raising property taxes to offset increased costs, libraries aren't taxing agencies and have few options to make up for the steep increases, he said.

Cherokee Regional Library Director Lecia Eubanks said cutting hours and eliminating health benefits for part-time library employees also will make it harder for libraries to attract workers, especially since the pay isn't that high to begin with.

"In the past, that's what's allowed people to come work for libraries, because they were able to get benefits," she said.

Forsee is considering cuts because the increase will cost his cash-strapped library system, which serves Whitfield, Murray and Gordon counties, an extra $34,000 annually -- a 74 percent increase. Because of budget constraints, the library system cut its hours last fall for the first time since Forsee was hired in 1995.

Meanwhile, "the library's never been used any more than it has now," he said.

The library system had the equivalent of two dozen full-time employees when he started 17 years ago. In the past two years, the number of full-time equivalent employees has dropped from 18 to 91/2, he said.

"We've been doing more and more with less and less for years here," Forsee said.

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