Cost of State Benefits Continues to Rise

April 22, 2004 ( - The cost of benefits for state employees continues to rise.

The 2004 Employee Benefits Survey, published by Washington, D.C. economics consulting firm Workplace Economics Inc, found as 2004 dawned, 14 states reported a total employer/employee premium for family coverage of more than $900 per month. Those costs are only magnified for 15 states that pay the full cost of coverage for individual employees and five states that pay the full premium for family coverage.

As with private sector plans, a combination of factors contributes to exactly how much employees pay in. The report found in most states, the amount paid by the employee and the state depends on the health plan and level of coverage selected by the employee. In four states the portion of the premium paid by the employee varies by salary. To assist employees with the rising costs, 43 states now offer pre-tax flexible spending accounts for medical, dental, vision, life insurance, and other expenses not covered by health plans, and all 50 states offer pre-tax dependent care accounts.

Even as health-care cost have risen, states still provide for their retirees. A ll 50 states make health insurance available to retirees up to the age of 65 and 48 states provide coverage under the state plan for retirees age 65 or older. Further, in 11 states, the full cost of individual coverage for retirees under age 65, who are not yet eligible for Medicare, is covered by the state and 17 states pay the full premium for Medicare-eligible retirees over the age of 65.

Also on the rise is the cost of state pension. Workplace Economics found many state pension contribution rates increased in 2004 in order to maintain adequate funding levels and to compensate for poor stock market performance during the period from 1999 to 2002. Additionally, the study found deferred compensation plans were offered in all 50 states and 13 states match a portion of the employee’s contribution, up to a specified maximum.

The 114-page survey report is available for purchase at .