Plan could expand medical benefits

Spokane County commissioners have expressed interest in a plan to take some of the sting out of rising health care costs by requiring public works contractors to pay medical benefits.

The proposal by the Spokane Alliance social advocacy organization would affect only nonunion contractors who don’t provide health insurance for all their employees.

Union contractors all provide medical coverage.

Companies that don’t want to provide medical insurance could instead put the same amount of money into federally established “health reimbursement accounts” that can be used only for health care.

Proponents say the requirement would reduce costs for employers because they would get a tax break on money that goes for health benefits.

The money would come from the “prevailing wages” – including benefits – that federal law requires contractors to pay on public works contracts. The portion that goes to medical benefits is calculated by the state Department of Labor and Industries.

Making sure nonunion contractors get the same portion of medical coverage “helps us all,” Spokane Alliance spokesman Gary Cooper told commissioners last week.

There has been an 87 percent increase in health care costs over the past five years, he said, citing a 2006 Kaiser Family Foundation survey. He said the rocketing costs contribute to a downward spiral in which fewer people can afford medical insurance, and premiums go higher when doctors and hospitals charge more to cover additional charity cases.

Under the Spokane Alliance proposal, the county and its contractors would pay the same labor costs while helping hold down medical insurance premiums and welfare costs. And workers would receive the same overall compensation, although not so much in cash.

At best, however, the plan would provide more symbolism than substance. Most major public works projects are performed by union contractors that all provide health benefits. Most nonunion shops also offer medical coverage.

“In the big picture it’s small, but it’s a step in the right direction,” said Rick Evans, who represents Local 238 of the Laborers International Union of North America, which is a member of the Spokane Alliance.

Evans said all local building trades unions voted recently to support the Spokane Alliance proposal because they are concerned about rising costs in their own health care plans.

The Spokane Alliance comprises 30 churches, unions, education associations and civic organizations that the group says represent more than 30,000 individuals. Member organizations discuss pressures on families – such as inability to afford health care, lack of living-wage jobs and caring for the elderly.

Wim Mauldin, the Spokane Alliance’s “lead organizer,” said in an interview that the “strenuously” nonpartisan organization seeks consensus, not confrontation.

“It doesn’t make sense to do things that just torque people off,” he said. “We’re looking for things that make sense for everybody.”

Proposals need to be “focused and winnable,” Cooper said in an interview. “The point is always getting to people’s self-interest.”

A former Catholic deacon, Cooper taught English for more than 20 years at a South Dakota university and was a pastoral associate at St. Augustine’s parish on Spokane’s South Hill for nearly 15 years.

“If you’re in a church, this is where the gospel meets the road,” Cooper said of the Spokane Alliance’s mission.

But he finds self-interest more reliable than altruism, and for that reason he believes county commissioners will agree the alliance’s health care proposal is a winner.

“It’s hard to see why they wouldn’t be for it,” Cooper said.

He said the alliance is confident of support from County Commissioner Bonnie Mager, who placed the proposal on commissioners’ April 17 agenda. “And it seems to me that Commissioner (Mark) Richard was very encouraging.”

“It makes sense,” Richard told Cooper and other Spokane Alliance representatives. “I think there is a good philosophical basis for this approach.”

Commissioner Todd Mielke had a number of reservations, however. In particular, he was concerned that the plan would drive up administrative costs for contractors and make county projects less attractive to bidders.

“We are seeing more and more of our projects coming in over (the bid prices) we expected,” Mielke said.

Also, Mielke said he was reluctant to force workers to have part of their pay diverted to medical insurance or health reimbursement accounts if they already have coverage through a spouse’s job.

Commissioners directed county Engineer Bob Brueggeman to gather information about how the proposal might be received by the state and federal agencies that pay for many of the county’s road projects.

Brueggeman told The Spokesman-Review on Thursday that “it doesn’t look like the funding agencies will have a problem.” However, he said the county would face some relatively small administrative costs on projects, such as road improvement districts, that don’t receive state or federal money.

The county would have to start collecting payroll documents not currently required for locally funded projects, but the cost could be passed to the property owners who form road improvement districts, Brueggeman said.

“It shouldn’t be a big cost: a few thousand dollars, maybe up to $5,000 per project,” he said, noting road improvement district projects typically are in excess of $100,000.

Some contractors question whether the benefit would outweigh the cost, though.

Eller Corp. controller Linda Eller said her Spokane construction firm already pays a health care allowance and requires all its nonunion employees to subscribe to one of two company-sponsored medical plans or prove they have coverage from another plan.

The Spokane Alliance proposal “wouldn’t make a big difference to us,” Eller said.

Ada Loper, controller for ACI Northwest in Coeur d’Alene, said the situation is much the same in her shop. Workers can’t get any of the $2.41-an-hour health portion of their prevailing wage until premiums in the company’s medical plan have been paid.

Still, Loper worries about increased paperwork.

Ditto, said Steve Robinson, vice president of Spokane Rock Products, which also has a medical insurance program.

“It would create another paperwork bureaucracy, and what would be the purpose?” Robinson said.

He doubts there is any public works construction worker without medical coverage.

Wayne Brokaw, executive director of the Inland Northwest Associated General Contractors, said all 350 of the association’s member companies in Eastern Washington provide medical benefits.

About 60 percent of the association’s member companies are nonunion, Brokaw said.

Company-sponsored medical plans vary widely according to the age and size of work forces, he said, wondering how county officials would decide which plans are adequate. Also, he wondered, what would happen to money in health reimbursement accounts if employees don’t use it quickly enough.

“It all sounds great on the surface,” Brokaw said. “I think it’s a great topic for discussion because, as we all know – we who pay for health insurance – a portion of that every month is going for the uninsured.

“Underneath, I get concerned about the bureaucracy and these administrative costs that just keep coming.”