Most state and county workers in Hawaii saw a $45 to $250 drop in take-home pay this month because they are now paying a larger share of their health insurance costs.

More than 36,000 workers in the Hawaii Government Employees Association, University of Hawaii Professional Assembly and Hawaii State Teachers Association are now paying 50 percent of their health insurance premiums, up from 40 percent or less.

The change took effect with a new contract on July 1. Even though it was announced earlier, it still came as a surprise to many when they got their July 20 paychecks.

"They knew this change was coming, but they hadn’t seen actual numbers," said Barbara Coriell, administrator of the Hawaii Employer-Union Health Benefits Trust Fund, which manages public employee benefits. "It’s one thing for people to say, ‘My contribution is going from 40 to 50 percent,’ and another thing to see the dollars on your paycheck."

An increase in the employee portion from 40 percent or less to 50 percent means most workers are actually paying 25 to 30 percent more for health insurance than they did last month, said Coriell. For example, a worker with family coverage who paid $442 before July 1 is now paying $580, a 31 percent increase.

State and county workers are also absorbing up to 5 percent in pay cuts under their new contracts.

The contracts were adopted to help the state deal with a budget shortfall brought on by a slow economy and lower tax revenue. Ironically, the pay cuts and higher health insurance contributions will force many government workers to reduce personal spending, which could, in turn, hurt economic growth.

"Spending cuts actually have a greater impact on the economy than a tax hike," said Lawrence Boyd, economist at the University of Hawaii West Oahu’s Center for Labor Education and Research. "Tax hikes generally are spread way out over a much wider area and have much less of an impact. When it’s $50 or $60 a month, then people have to make adjustments in their consumption, and they take that out of the economy."

Boyd estimates the state’s economic growth could be cut by a quarter of a percentage point as a result of lower spending by government employees.

"Basically spending cuts, the way they’re distributed, directly affect peoples’ income. There’s a multiplier effect to that," Boyd said.

Keith Mylett, an English teacher at Kalani High School, whose family health insurance contribution more than doubled this month to $531 from $254, said the increase will cut into his family’s spending and ability to pay off debt.

"I have student loans that I’m still paying off. Right now I have to consider just paying interest-only on that. I’m just going to have to cut back in every way possible. It’s almost not a livable wage," said Mylett.

John Nippolt, chairman of the art department at Kalani High, said his share of medical insurance premiums more than doubled to $368 from $174 per month.

"I have a 5 percent cut in my pay wages, 125 percent increase in my medical payments. What does this leave somebody? I don’t have any personal spending — I don’t even go to the movies," Nippolt said.

The new premium-split does not apply to workers in the United Public Workers union, the HGEA’s registered nurses unit, the Hawaii Fire Fighters Association or the State of Hawaii Police Officers Union, who are still negotiating new contracts. It also doesn’t apply to Hawaii County workers. Hawaii island decided to continue to pay 60 percent of its workers’ health insurance premiums.

But among government workers affected, employees with the lowest rates previously are seeing the biggest increases. That includes workers who opted for plans in which a worker pays a high deductible before getting coverage, but a lower monthly premium.

Rates have soared more than 150 percent on average for 325 workers covered under high-deductible plans and more than 70 percent for 1,100 employees in Kaiser Permanente Hawaii’s basic plan, EUTF said.

HGEA, the state’s largest public employee union, agreed earlier this year to a 5 percent pay cut and an even split between employers and workers on health insurance costs.

The Department of Education unilaterally implemented pay cuts, furloughs and health insurance increases this month for 12,500 teachers.

The EUTF, in an effort to inform affected workers of the change to employee medical premium contributions, emailed and posted the new premium contribution charts on its website July 7.

While government workers are paying a larger share of health insurance costs, premiums themselves did not rise on July 1. However, most premiums are likely to increase on Jan. 1, EUTF’s Coriell said.