Facing Rising Costs and Dwindling Reserves, King County Audits Employees' Health Care Coverage
"The County cannot support 4 percent to 5 percent wage increases alongside increased benefit contributions without some employee input," a county spokesperson said.
By Erica C. Barnett
King County employees received notice earlier this month that the county is conducting a formal audit to make sure people aren't receiving health care benefits for "dependents" who aren't really dependents—exes, kids who no longer qualify as dependents, or co-habitants who don't qualify as family members, for example.
According to notices that went out to county workers last month, anyone who fails to provide valid proof that their dependents are eligible for health care by July 29 will lose those benefits, effective immediately, and may have to pay back previous benefits for which their dependents were ineligible.
The audit came as an surprise to many county employees, forcing some to scramble to find old domestic partner registrations, marriage licenses, and proof that that their children still qualified for their health insurance.
"Conducting a dependent eligibility review is an employer best practice to ensure that everyone who is covered on an employer’s benefits are eligible to receive those benefits," Amy Enbysk, a spokesperson for King County Executive Dow Constantine's office, said.
But the audit, which will cost the county nearly $165,000, is just a partial response to a much larger issue: King County's medical costs have ballooned in recent years, and the county says its workers need to step up by paying more of their health-care costs.
Historically, the county has fully funded employee premiums at a rate that increases 4 percent every year (a number that was recently increased, for next year only, to 9 percent). If the annual increase in health care costs is less than that amount, the excess goes into a fund called the protected reserve fund, which was seeded with an initial $25 million back in 2014. If that fund drops below $15 million, as it did this year, the county and its unions go into a dispute resolution, or arbitration, process to ensure the fund doesn't run dry.
During the COVID lockdowns of 2020 and 2021, the reserve fund grew dramatically, rising to more than $90 million. After lockdown ended, workers started scheduling medical appointments they delayed at the height of the pandemic, causing the fund to dip, a trend that has continued for several years. (Currently, according to the county, the fund contains $20.6 million).
To avoid arbitration, the county and its unions agreed to a one-year contract extension that will require many employees to start paying monthly premiums, ranging from $50 to $75. (Workers who opt in to a Kaiser HMO plan will be exempt.) While many employees of private companies are accustomed to paying premiums, the change is significant for county workers, whose health care has historically been premium-free.
Embysk said the new premiums reflect the reality of rising health care costs."The $50-$75 contribution is modest compared to premiums charged by other employers."
Teamsters Local 174 political director Michael Gonzales said the lockdown rebound is just one part of the explanation for ballooning county health care costs. A related issue, he said, is that after avoiding visits that might have caught problems early, people needed more expensive care.
"You have a cancer screening that might have caught [cancer] at Stage 1, but now you aren't catching it until Stage 3 or 4," Gonzales said. As a result, there have been "a large number of large claims over $50,000," and "that, plus the increase in the cost of drugs" has accounted for most of the spike in costs, he said.
The changes the county and its unions agreed to only apply through 2025; after that, the two sides will have to come up with an agreement that keeps the reserve fund healthy long-term—and that could involve shifting more costs to employees.
"It is incumbent on King County and its unions to be good stewards of the County’s benefit plans," Embysk said. "While employees have requested higher wages amid rising healthcare costs, the County cannot support 4 percent to 5 percent wage increases alongside increased benefit contributions without some employee input."