Illinois has a budget crisis. State workers’ health-insurance benefits make up $3 billion of the state’s budget. Illinois government can continue to provide excellent health insurance to state workers while bringing the costs more in line with what is common in the private sector, and also what is compatible with the Affordable Care Act. By retooling the health-insurance offerings available to state workers, taxpayers stand to save $1 billion while still offering a competitive, generous benefit.

State-government employees are provided generous health-insurance plans – often with no deductibles – and contribute only a small share toward that coverage.

State-government employees pay between $68 and $211 per month for individual coverage that is far more generous than almost every option currently being sold to the public. Coverage that includes two or more dependents is as low as $132 per month and does not exceed $287, depending on the type of plan selected and the employee’s salary.

Overall, active state-government employees are paying approximately 17 percent of the total cost of health-insurance coverage for themselves and their dependents. That is a smaller share of the total than what a private-sector worker in Illinois might pay. For example, a worker participating in an employer-sponsored insurance plan, or ESI, contributed an average of 22 percent of premiums for individual coverage and almost 26 percent of premiums for family coverage in 2013.1

Three changes must be made:

First, state-government employees should shoulder a larger share of their health-insurance coverage costs. Those costs should be tied to the actual health-care coverage costs, not salary.

Second, health-insurance plans for state-government workers should be brought closer in line with the coverage that average Illinoisans have access to, and the amount they pay for that coverage.

Third, workers should have an expanded range of plan choices, portability of coverage and an ability to establish employee-owned health savings accounts.