Tough time, tough choice: Health benefit for employees of county governments

Many county governments find it increasingly difficult to provide health benefits to their employees because of rising premium costs, which often comprise a large portion of county budgets. Thus, many county governments must either find new cost containment strategies or reduce employees' health benefits.

This study provides a profile of the health benefits provided to county employees in the state of Kentucky. Our intention is to provide county governments with needed information on health insurance alternatives that will contain costs while maintaining employee health benefits.

The data were collected through a mail survey of county treasurers in the 118 Kentucky counties that were headed by county judge executives. All the county governments offered employee health benefits. However, 98% reported a decrease in the generosity of health benefits over the past 3 years. Over two-thirds had changed insurance carriers over the previous five years, among which 71% had changed more than once.

The average number of county employees was 162. Over two-thirds of the county employees were regular full-time; 22% were regular part-time; and 10% were seasonal or temporary workers. Over half earned less than $25,000, among which 24% earned less than $10,000 per year. Almost all full-time county employees (99%) were eligible for health insurance, but only 78% took up the option.

Annual cost of employee health insurance increased by an average of 34% between 2003 and 2006. Over 8% of the 2006 fiscal-year budget went to employee health benefits, an increase from 6% in 2003. About 22% of eligible employees did not take up health insurance, probably because coverage was available from other sources. Offering the option of a cash payment in lieu of health insurance could be a cost-effective alternative for county governments. County employees may prefer this option rather than reducing or foregoing employee benefits all together.