Survey: Some local governments cut medical benefitsNews added by National Underwriter on October 23, 2012
National Underwriter

National Underwriter

Joined: April 22, 2011

By Allison Bell

A few local government employers have been phasing out group health benefits.

Analysts at Cobalt Community Research have reported that finding in a summary of results from a survey of about 2,330 local units of government.

One discovery the analysts made is that government employers are not necessarily large employers. Although 21 percent of the participating units had more than 100 employees, 48 percent had 10 or fewer employees.

Government employers have traditionally had a reputation for offering stable jobs and good benefits, and the analysts found that the weak economy has shaken those employers’ ability to live up to that reputation.

In 2011, 18 percent of the government employers reported their revenue had fallen 6 percent or more.

This year, government revenue has started to recover in many communities, but 11 percent of the government units are continuing to report revenue drops of 6 percent or more.

The falling revenue has affected the likelihood that government units will offer health benefits at all.

In 2011, 3 percent of the government employers said they were planning to close health plans to new enrollees, and 5 percent said they had actually closed plans to new enrollees. About 36 percent of the people affected by the health plan enrollment freezes were active government employees.

This year, government employers seem to be more confident about their ability to continue to offer health benefits. Only 1 percent said they will be closing health plans to new hires, but 4 percent said they have actually closed health plans to new hires.

About 1 percent of the employers said they have completely eliminated some or all group health plans. Seventy-four percent of the people affected by the plan shutdowns were active government employees.

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