SUPERVISORS TO VOTE ON BENEFIT HIKE TAXPAYER COSTS FOR INCREASED EMPLOYEE PACKAGES NOT ADDED UP.

Byline: Troy Anderson Staff Writer

At a time when Los Angeles County is on the hook for up to $9.4 billion to pay health benefits for retirees, the Board of Supervisors is set today to further sweeten the benefits package for current workers.

The supervisors will vote today whether to increase monthly contributions to the so-called cafeteria benefit plans for nonunion employees from $591-$810 to $626-$852, beginning next year. They will also vote whether to raise short-term disability payments for both industrial and nonindustrial injuries from 40 percent to 70 percent of a worker's income after a two-week waiting period.

A new optional benefit funded by employees would pay 100 percent of an employee's salary for three weeks and 80 percent thereafter to cover injuries and conditions that are not work-related. Nonunion county employees get short-term disability because they are not entitled to sick leave.

County officials could not immediately calculate how much additional money these changes would cost taxpayers.

The increased costs come as government agencies and school districts throughout the state are facing rapidly rising health care costs for current and retired employees, driven by health care inflation and the initial wave of baby boom retirements.

``It's a ticking time bomb,'' said Jon Coupal, president of the Howard Jarvis Taxpayers Association. ``It appears to me that those in government have learned no lesson whatsoever from the dot-com boom and bust.

``We are headed for a train wreck not only with pension liabilities, but with these guaranteed medical expenses for life that could render the pension problems small by comparison. It seems there are no elected officials who have the capacity to say no and taxpayers are going to get stuck with the bill.''

Bill Lynes, the Chief Administrative Office's compensation division chief, said that each year health insurance premiums for employees generally go up, along with the county's contributions to its employees' health and dental insurance plans.

These proposed increases follow the supervisors' vote last week to increase health and dental insurance premiums for union-represented employees by 4 percent to 13 percent, with an average 8 percent increase. That compares with an average 5 percent health insurance premium increase for nonunion employees.

``The cost of health care has been going up at an alarming rate - a rate that far exceeds the growth of the rest of the economy - and so there has been pressure on employers who have traditionally provided these benefits to their work force to shift the cost onto employees,'' said Bart Diener, assistant general manager of Service Employees International Union, Local 660, which represents 50,000 county employees.

``We are proud that our members still have plans available to them which fully cover their families with little or no out-of-pocket expenses.''

The county negotiated a 7.5 percent cap with the unions on how much the county's share of the costs for health benefits could increase annually. Also, the contract with SEIU Local 660 calls for employees to pay $5 co-pays for generic drugs, $10 for brand-name drugs and $50 for emergency room visits.

``We achieved about $10.7 million in savings from carriers' initial positions and part of that was due to concessions Local 660 agreed to in 2005,'' said Frank Frazier, special assistant to the Chief Administrative Officer.

The county grand jury recently raised concerns about the county's unfunded liability to pay future retiree health benefits, noting that the amount could be up to $9.4 billion. The county currently pays $261 million a year for retirees' health care.

When health-care costs were lower, government agencies and school districts agreed to give public-employee union workers health benefits increases, sometimes in lieu of salary increases. But new nationwide accounting rules adopted by the Governmental Accounting Standards Board going into effect in 2007 require government agencies to calculate the true costs of these benefit increases.

``The one outstanding challenge is retiree health and that will be addressed in the next year and a half,'' CAO David Janssen said.

Troy Anderson, [phone]

troy.anderson(at)dailynews.com