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Politics & Government

New Government Union Labor Contract To Save PA $214 Million

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Gov. Tom Wolf
/
Flickr

Gov. Tom Wolf's administration said it will save $214 million over the next three years by changing health benefits and long-term non-paid leave rules for government employees.

“This is the first health plan design change in over 12 years for the state and the changes represent the most significant health plan savings in Pennsylvania in recent history,” said Spokesman Jeff Sheridan.

Much of the savings will be generated through having employees and retirees in PPO plans cover deductibles and make co-pays for some in-network services and prescriptions.

The changes will take effect Jan. 1, 2017.

Other savings will come from changes in union contracts. A tentative deal with the American Federation of State County and Municipal Employees Council 13 would reduce the number of days a worker on unpaid leave is eligible for health benefits from 39 weeks to 25 weeks. The contract also includes a minimum contribution increase from 2 percent to 2.5 percent. 

“There is about, I think approximately 15 other contracts currently being negotiated,” Sheridan said. “We expect very similar contracts but I can’t speak to any specifics at this time.”

That union deal also includes pay increases totaling 7.25 percent over three years.

The wolf administration breaks down the $214 million in savings as follows:

 

  • Through increased employee contributions toward health benefits, the commonwealth will save $13.6 million on the AFSCME contract alone and $31 million total if applied to all employees.
  • The health plan design changes that will apply to AFSCME members will also apply to all employees in the commonwealth and save a total of $59 million over three years.
  • Changes to extended leave without pay provisions in the AFSCME contract will save an additional $3 million.
  • The Wolf Administration has made health plan design changes to retiree health plans that will save a total of $121.2 million over 3 years.