Government-Employee Health Benefit Reform

Government union contracts under Proposal 2 could override the so-called “80/20” law, which protects taxpayers by putting a ceiling on government employer payments toward government-employee health insurance. Government employers can choose between a cost cap expressed in dollar terms or as a percentage of employee health insurance premiums (the latter cap has a maximum employer contribution of no more than 80 percent of government-employee health insurance premiums).[74] The lost taxpayer savings that might arise from undercutting this law will be discussed below.[75]