Administering Health Plan Burdens During Economic Downturns: Lessons From Local Governments and the Great Recession

The Great Recession exacerbated health care spending as a share of total revenue for local governments through the combination of decreased revenues and increased health plan premiums. This event forced the hand of local governments to choose between making layoffs, cutting services, or reducing emp...

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Bibliographic Details
Published in:Compensation and Benefits Review 2016-09, Vol.48 (5-6), p.115-127
Main Authors: Edwardson, Nicholas, Perlman, Bruce J., Scicchitano, Michael J.
Format: Article
Language:English
Subjects:
Administrators
Economic stabilization
Employee benefits
Employees
Great Recession
Group health insurance
Health care expenditures
Insurance premiums
Local government
Recessions
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Summary:The Great Recession exacerbated health care spending as a share of total revenue for local governments through the combination of decreased revenues and increased health plan premiums. This event forced the hand of local governments to choose between making layoffs, cutting services, or reducing employee benefits. Understanding more about why and how they did so is imperative for improving how local governments structure benefits during times of economic stability or surplus and also how they react during future economic downturns. In this study, a national survey of city and county administrators (N = 822) was conducted to understand if and how local governments introduced health plan burdens to their employees in response to the Great Recession. While a majority of local governments did not introduce significant health plan burdens to their employees, when a burden was introduced it was distributed disproportionately to current and future employees while protecting retired employees.
ISSN:0886-3687
1552-3837
DOI:10.1177/0886368717720584