FARGO — The average North Dakotan who receives health insurance through an employer pays about a fifth of the cost of the monthly premium, or $1,387.
That estimate for 2019, the most recent available, is from the Kaiser Family Foundation, which found that the average employee contribution for health insurance both in North Dakota and the United States was 21%.
But that’s not the case for state employees, including legislators and other elected officials, in North Dakota. State taxpayers pick up the full cost of health insurance premiums for all state employees.
For North Dakota’s 141 legislators, who set pay and benefits for themselves and all other state employees, that will amount to a premium subsidy of $1,426 per month for health insurance.
That’s the same amount as for other state employees, who pay the same premium for single as well as family coverage. As of January, North Dakota had 14,607 employees and is projected to spend $495 million on health insurance for the 2019-21 biennium.
Also, legislators are considering raising their pay for the second session in a row.
During the 2019 session, each legislator earned at least $41,500. Lawmakers now earn $518 per month and $186 per day when in session. Plus, they receive a housing allowance of more than $1,800 a month during the session.
If approved for the next two-year budget, the pay increase would cost about $167,000. The pay raise, equal to that for state employees, would increase pay by 1.5% in the first year of the next biennium and 2% the second year.
“Legislators receive the same health insurance plan as the state employees,” said Sen. Tim Mathern, D-Fargo. “It is an important benefit to aid in recruitment of candidates to the Legislature.”
Over the years, Mathern has repeatedly proposed making the state health plan available to all citizens as a way to broaden access to health insurance.
Sen. Rich Wardner, R-Dickinson, the Senate majority leader, said the state would have a harder time recruiting and retaining a talented workforce if insurance costs were higher.
“When it comes to state employees, we maybe don’t have quite as good a salary package as other states, and the health insurance is a big deal,” he said. “It helps us keep quality employees in the state of North Dakota.”
The complimentary insurance perk enjoyed by lawmakers is not a self-serving carve-out, but a matter of long-standing precedent, Wardner said.
“It’s a great benefit for lawmakers — no question,” he said. “However, it’s been that way since back in the (1970s), and there’s been no reason to change it.”
During some lean years, when the budget struggled with shortfalls, state employees went without pay increases but kept the full health insurance benefit.
In the private sector, employers pay the full health insurance premium for single coverage for roughly 60% of employer groups who are insured through Blue Cross and Blue Shield of North Dakota, spokeswoman Andrea Dineen said.
That doesn’t include single-plus or family coverage, she said. “The rest contribute less, down to 50% of an employee-only premium.”
High-deductible plans have become more popular in group coverage to encourage employees to be better health-care consumers. That’s the case at Blue Cross Blue Shield, Dineen said, which also has its employees pay a portion of their premiums.
North Dakota was the only state that pays the full cost of health insurance for state employees, according to a 2014 study by the Pew Charitable Trusts.
Among the least generous states, state employees in Hawaii paid 42% of their health insurance premium cost and state employees’ share in North Carolina was 38%, the Pew report said. Next to North Dakota, the most generous states were Arkansas and Iowa, where state employees paid 3% of their health insurance premiums.
“Public employees or public servants are usually or typically paid less than the private sector and the benefits help make up for that,” said Scott Miller, executive director of the North Dakota Public Employees Retirement System.
To keep its grandfathered status under the Affordable Care Act, passed in 2010, which permits the state from having to provide certain coverage mandates, such as employer-paid contraception, the state can only increase the employees’ share of premiums by up to 5%, he said.
“We’re pretty much right up against that limit already,” Miller said. “We’re kind of stuck where we’re at.”
Losing its grandfathered status would increase North Dakota’s health insurance costs an estimated 3%, he said.
State employees and legislators may remain on the state health plan even if they are eligible for Medicare, said Rebecca Fricke, the chief benefits officer for the North Dakota Public Employee Retirement System.
That’s because federal regulations require employers with more than 20 employees to offer their employer coverage to individuals who are eligible for Medicare, she said. State law requires the state to pay the full family premium on behalf of state employees.
Also, federal requirements prohibit the state from charging Medicare-eligible employees a different amount for health insurance than non-Medicare-eligible employees. As a result, the state does not require Medicare-eligible employees to pay any additional premium for their coverage.
Although some residents may think lawmakers are overpaid, Wardner said the job comes with plenty of uncompensated duties like attending local government meetings and fielding calls from constituents year round.
Despite not paying for their own insurance, he said lawmakers are “very sympathetic” to residents struggling with rising health care costs. He said a constituent from western North Dakota came in just last week with grievances about her health care and lawmakers jumped on the case.
“It really bothers us, and we’re always looking for ways to help,” Wardner said.
Lawmakers supported Medicaid expansion and a reinsurance program, Wardner said, which aims to reduce costs for North Dakotans who buy insurance on the individual market.
There have been talks among lawmakers about making state employees take on part of the premium, but Wardner said the state has always had the revenue to cover the cost. He doesn’t foresee that changing anytime soon.