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About The OSEA news. (Salem, Oregon) 1970-1981 | View Entire Issue (July 1, 1970)
July, 1970 The OSEA News Page 5 Here is Fringe Benefit Report (Editor's Note: Delegates to OSEA's 1969 General Council unanimously adopted a resolution calling for the establishment of an Ad Hoc Committee to study the subject of state employe fringe benefits. In accordance with the resolution, a committee was appointed composed of representatives from Oregon business and industry, the Legislative Assembly, the Personnel Division of the Executive Department and the OSEA Board of Directors. The resolution directed the com* mittee to complete its report in time for its recom -. mendations to be submitted to Gov. Tom McCall before completion of his 1971-73 biennium budget proposal for the 1971 Legislature. The committee's report and recommendations follow.) Fringe benefits provided by the State of Oregon to its 30,000employes have been the subject of a good deal of discussion over the years among employes, em ploye organizations, the executive branch of govern ment and some members of the legislature. As could be expected, opinions of state employe fringe benefits vary widely. A few believe the state is competitive with industry and other governmental jurisdictions. Others think it lags badly in most areas. Many, probably the m ajority, feel it is competitive in some areas and behind in others. Resolution Asked for Study In an attempt to evaluate the state's position among competing employment in terms of the fringe benefits it provides, delegates to the 1969 General Council of the Oregon State Employes Association adopted a resolution which called for the establishment of an Ad Hoc Committee to study state employe fringe benefits. The committee was to be composed of 11 members: seven persons from industry, two legislators (one from each major political party), one member of the State Executive Department and oné member of OSEA's Board of Director's. Committee members are: Committee Members Guy Frazier, Personnel Director, Tektronix, Inc., Beaverton. Henry G. Hohwiesner, Regional Sales Manager, Blue Lake Packers, Salem. Norman F. Stone, Personnel Director, Eugene Water and Electric Board, Eugene. John M e rrifie ld , Executive, M e rrifie ld and Associates, Portland. William L. Mainwaring, Editor and Publisher, Capital Journal, Salem. Mrs. Emily P. Logan, former Commissioner, State Industrial Accident Commission, Corvallis. Rep. Philip D. Lang (D-Portland), member, Oregon Legislative Assembly. Rep. Hugh McGilvra (R-Forest Grove), member, Oregon Legislative Assembly. William -G. Hughes, Administrator, Personnel Division of the Executive Department. Dr. Lester B. Strickler, member, OSEA Board of Directors. Over-All Objective Besides being charged with evaluating the present fringe benefits given to state employes, the committee was asked to make recommendations regarding: (1) additional benefits that should be provided by the state, (2) present benefits that should be increased, and (3) present fringe benefits that should be reduced. Its over-all objective was to present a fringe benefits package which, in conjunction with the state's com pensation plan, would be competitive with that of In dustry and other governmental jurisdictions in Oregon. Governor Gets Recommendations The committee's fringe benefit recommendations w ill be submitted to Governor Tom McCall" in the hope that he w ill take them into consideration in preparing his 1971-73 budget proposal to the 1971 Legislature. Various Groups Testify In order to hear testimony on the subject of fringe benefits, the committee held a series of hearings. Among those who testified were representatives of the Oregon Legislature,- the Oregon State Employes Association, the State System of Highér Education, the Public Employes Retirement System, the State Per sonnel Officers Association and other persons who, by reason of their employment or position, are knowledgable about the fringe benefits offered by both private and public employers. Fringe Benefits Studied in its study, the committee examined those benefits which may be classified as either a. direct or indirect cost to the employer, depending upon the type of benefit. Such benefits included, but were not limited to, group insurance programs, social ^.security, unem ployment compensation, workmen's compensation, retirement, sick leave, vacation leave, holidays, reim bursem ent fo r tra v e l expenses, tra in in g programs, educational and other leaves, parking facilities, subsidized meals anc( housing allowances. Those fringe benefits studied by the committee, its findings and recommendations follow. . Benefit: G ro u p Insurance Program s The State of Oregon presently makes no contribution to any of the various group "insurance programs available to its employes. There are various life, in come protection, accidental death and dismem berment and hospital-medical-surgical group in surance programs available to state employes. Such plans are offered through the OSEA and the various state agencies. All of them, however, are completely employe-paid. While some highly sophisticated employer-paid and employer-partially-paid group insurance plans of various kinds have been provided to employes working for industry and other governmental jurisdictions, the state provides no such program for its employes. In its study, the committee divided the group insurance p r o g r a m s in to th r e e m a io r c a te g o r ie s : Benefit: Group Medical-Hospital- Surgical Insurance State Practice The state currently makes no contribution to em ploye m ed ical-hospital-surgical group insurance. There are presently over 100 separate health insurance policies, offered through 19 carriers, available to state employes. The committee heard testimony that, in at least one large agency, employe participation in group health insurance is low. Testimony revealed that a con siderable number of employes do not have the in surance because they cannot afford the cost of the premiums. Statistics show 17,540 out of 30,000 state employes provide hospital-medical insurance for themselves. Findings Thirty states now pay at least some portion of the employe group health insurance premiums. Included in those states are all of the western states with the exception of Arizona and Oregon. At the time that data was collected, which was 1969, there were bills pending in several state legislatures to increase the employer contribution. The federal government pays a portion of the medical-hospital insurance premiums for its more than four-million employes. According to the Bureau of Municipal Research and the League of Oregon Cities, 88 cities in Oregon currently pay either the total or a major portion of the medical-hospital and life insurance premiums for their employes. Twenty-three of Oregon's 36 counties pay a per centage of the medical-hospital insurance premium for their employes. Eight of 13 telephone companies located in Oregon, including Pacific Northwest Bell, pay at least part of the health Insurance premium for their employes. Eleven of the 33 power, electric and gas utilities, including Portland General Electric, Pacific Power and Light and Eugene Water and Electric Board, make a contribution toward employe medical-hospital in surance premiums. Twenty water districts In Oregon pay a portion of the employe health insurance premium. ■ - A survey questionnaire compiled by the Oregon Education Association revealed better than one-half of the school districts in Oregon presently pay a portion of. the employe medical-hospital insurance premium. A survey of 29 major firm s in Oregon and Southwest . Washington, performed by OSEA, indicates 25 of the companies pay at least a portion of the health in surance premiums for employes. Furthermore, 14 of the 29 companies pay a substantial portion of the dependents coverage. Oregon's Civil Service Commission (which was replaced by the Executive Department's Personnel Division in July, 1969), in its Salary and Wage Survey Report dated Dec. 1, 1968, said that 86 per cept of the private and public employers contacted within Oregon make contributions to the premium cost of their em ployes' group insurance plans. The State of Washington recently passed legislation on the subject of health insurance coverage for its em ployes.. The com m ittee suggests th a t’ the Washington legislation might well be used as a pattern for developjng the number of plans and a board to design the programs: "(1 ) There is hereby created a state employes' in surance board to be composed as follows: The 1 governor or his designee: the state directors of the d e p a r tm e n t of g e n e ra l 'a d m in is t r a t io n and th e departm ent of personnel; one m em ber representing an association of state employes and one m em ber representing a state employes' union, who shall be appointed by the governor; one member of the senate who shall be appointed by the president; and one member o f the house of representatives who shall be appointed by the speaker of the house. All ap pointments shall be made effective immediately. The firs t meeting of the board shall be held as soon as possible thereafter at the call of the director of per- sonnal. The board shall prescribe rules for the conduct of its business and shall elect a chairman and vice- chairman at its firs t meeting and annually thereafter. Members of the board shall receive no compensation for their services, but shall be paid for their necessary and actual expenses while on official business and legislative members shall receive allowances provided for in RCW 44.04.120." "(2 ) The board shall study all matters connected with the providing of adequate health care coverage for state.employes on the best basis possible with relation both to the welfare of the employes and to the state. The board shall design benefits, devise specifications, analyze carrier responses to ad vertisements for bids, determine the terms and con ditions of employe participation and coverage, and decide on the award of contracts which shall be signed by the trustee on behalf of the board. The board shall from time to time review and amend such plans. Contracts for health benefit plans shall be rebid and awarded at least every five years." "(3 ) The board shall develop and provide three employe health care benefit plans; one plan w ill provide major medical benefits as its prim ary feature, another plan w ill provide basic first-dollar benefits as its prim ary feature plus major medical, either or both of which may be provided through a contract or con tracts with regularly constituted insurance carriers or health care service contractors as defined in chapter 48.44 RCW, and another plan to be provided by a panel medicine plan in its service area only when approved by the board. Except for panel medicine plans, no more than one insurance carrier or health care service contractor shall be contracted with to provide the same plan of benefits: PROVIDED, That employes may choose participation in only one of the three plans sponsored by the board." ^continued to page 6)
