Merced County is changing its health insurance plan offerings and contributing more to healthcare costs as employees see yet another year of increased premium rates.

Brianna Vaccari

The Merced FOCUS

The changes come after a year of intense negotiations with employee unions who argued the skyrocketing insurance costs resulted in a pay cut for their members.

Last year, employees were hit with a historic high – at over 12% – rate increase to their plan premiums. The county increased the amount it paid as well, in an attempt to offer employees some relief.

The Board of Supervisors on Tuesday rubber stamped a number of actions related to the insurance changes. The board also passed its $1.14 billion budget and an MOU with its largest union, avoiding an impending strike.

Since last fall, county supervisors and executive staff have warned this year’s budget would be tight due to the state of California’s budget crunch. While this year’s budget was down from the previous year, it’s because the county is wrapping up spending from one-time pandemic relief funding.

The unions, however, have questioned the county’s priorities and fiscal responsibility when the county offered no wage increases at the bargaining table. Since last year’s rate hike for health insurance, the only employees to see pay raises were members of law enforcement.

“I can guarantee that all unions will be working hard to ensure that we reunite all workers, to make sure that we become stronger and to make sure that we have livable wages and fair employment,” said Marta Echevarria, who works for the county’s Health and Human Services Agency.

“We will be focusing on engaging the community to pay attention to those who we as a community choose to represent us in the future, because continued failure to address wages is not something that should be rewarded with re-election,” Echevarria told the board.

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New Health Insurance Plans

The Board of Supervisors voted Tuesday to approve a 4.8% increase to all plan premiums; increase the contribution cap for the amount the county contributes to plans; and quit providing a top-tier plan and offer alternative plans instead.

Sommer Moniz, a deputy CEO for the county, explained that the rate increases are passed down from the county’s healthcare provider, Public Risk Innovation Solutions and Management (PRISM) Health.

Merced County’s premium rate is determined by a number of factors, including utilization rate by employees, overall claims history, the performance of the pool managed by PRISM and general market conditions.

“Our budget is balanced at this point in time, but the rapid increases to the cost of living and costly state mandates are not going away.”

Rodrigo Espinosa, Merced County Board of Supervisors chair

During Tuesday’s meeting, the supervisors reminded employees that the county does not set the health care rates.

“I think it’s important that people recognize that ideally, we wouldn’t be doing this,” Supervisor Josh Pedrozo said. “But that’s just the cost of doing business.”

The employee utilization rate for what’s largely considered the county’s best – and most expensive – plan offered is no longer sustainable, Moniz told the board Tuesday. Employees who previously chose that plan will not be able to choose it again for 2025 coverage.

They can choose from four other existing options, ranging from low to mid-cost plans to high deductible plans with and without health savings accounts. If employees currently enrolled in the county’s Anthem 200 plan don’t choose a new plan, they will be automatically enrolled in an alternative plan.

The county also will not continue offering the Anthem 200 plan to retirees.

Last year, about half of employees – or 1,013 people – who purchased health insurance through the county chose the Anthem 200 plan, according to numbers provided to The Merced FOCUS by county executives. Over 560 employees chose the low cost plan; about 300 chose the Anthem 1500 plan; and 230 others chose high deductible plans.

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Additionally, for union groups that reached bargaining agreements, the county will contribute more to healthcare costs. The county last year temporarily increased the cap for the amount it contributes, and a number of unions negotiated the raised cap into their new labor agreements.

Supervisor Lloyd Pereira said increasing the cap will cost the county and save employees about $3.5 million total this year.

“It just really kind of disheartens me to have them (county employees) come here and say, the county is doing nothing for wages because $3.5 million is $3.5 million,” he said. “That’s a cost that the employee does not pay anymore.”

In response, some employees said the increase to the county’s cap so far has amounted to $13 per pay check. A number of employees expressed their displeasure with the changes to insurance plans in comments on Facebook, where the county streams its meetings live.

“We urge residents to consider how their county is governed as they head to the polls — not just this year, but every year. Real progress requires leaders committed to supporting the workforce that serves our community.”

Jerald Phelps, AFSCME Local 2703 president

AFSCME Agreement

The board also approved a one-year MOU with its largest labor union, AFSCME Local 2703, which represents around 1,000 county workers.

The MOU does not include any wage increases, but it does include changes to the healthcare cap and vacation sell back and creates a remote work policy.

AFSCME members in August voted to strike but continued negotiating with the county in hopes of reaching a deal.

Jerald Phelps, AFSCME Local 2703’s president, said in a statement the approval of the budget underscores the ongoing struggle faced by Merced County workers who continue to seek a livable wage.

He said the union’s fight is “far from over,” and the budget passage is “a comma, not a period” in the ongoing struggle for fair wages and better working conditions.

“The modest gains we achieved reflect the tireless efforts of our negotiating team and the unwavering resolve of our members, who stood ready to strike for fair treatment, as shown by the razor-thin ratification vote,” he said.

“This decision is just one step in our persistent fight for fair wages, affordable healthcare, and greater transparency from county leadership. We urge residents to consider how their county is governed as they head to the polls — not just this year, but every year. Real progress requires leaders committed to supporting the workforce that serves our community,” he added.

In the last round of negotiations, the only bargaining units that secured raises were ones representing Merced County Sheriff’s Office employees, including sergeants, deputies, dispatchers and correctional officers.

All of the MOUs negotiated so far this year will expire in June of next year.

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County Budget Passed

The Board of Supervisors also passed a balanced budget on Tuesday.

County executives in June presented the proposed budget for the upcoming fiscal year and asked department directors to find ways to cut costs by $6.7 million in anticipation of a shortfall.

However, County Executive Officer Raul Lomeli Mendez said that wasn’t necessary at this time because the county’s revenue came in higher than anticipated, thanks to property and sales tax revenue.

Overall, the $1.14 billion budget was more than $4 million higher than the proposed budget.

“Our budget is balanced at this point in time, but the rapid increases to the cost of living and costly state mandates are not going away,” said Board Chair Rodrigo Espinosa in a statement.

“A continued focus needs to be placed on sound budgetary practices that allow us to live within our available resources — something the taxpayers expect and deserve.”

About the Author

Vaccari is the accountability and government watchdog reporter for The Merced FOCUS.