For the first time, state workers will help pay for their health insurance, after State Employees' Association members agreed to a proposed two-year contract with the state. The vote - which SEA officials tallied yesterday evening - reflects a shift in the balance between wages and benefits and gives employees a roughly 10 percent pay increase over the next two years.

The vote split 61 percent to 39 percent, with 1,607 union members supporting the contract and 1,045 opposing it. The SEA represents about 10,000 state workers, roughly 7,000 of whom are voting members.

"I just feel very proud of the state employee workforce at this point," said Diana Lacey, chairwoman of the SEA bargaining team, which crafted the contract with Gov. John Lynch's negotiating team. "This is a big change for people to move into, and it's been debated heavily over the past several weeks."

For many state workers, the vote hinged on the health insurance changes. In past years, the state covered the full cost of employees' health insurance, a setup some said attracted them to the state workforce. Opponents of the new contract said that the new wage increases will scarcely cover the new health care costs.

But the old deal, union officials argue, came at the expense of wages: State pay lags behind the private sector and other state governments. State employees may have sidestepped health insurance payments in years past, but they've paid in other ways, Lacey said.

"It's clearly evident that we're paying about 20 percent of our wages right now for health care," she said. "Now, we'll only be paying about 15 percent, or 10 percent."

For years, governors have unsuccessfully pushed SEA members to pay for a portion of their health insurance. For every dollar a state worker earns, the state contributes about 50 cents for employee benefits, lawmakers say. And low state wages make it difficult to attract and retain skilled workers, according to New Hampshire officials.

Before yesterday's votes were tallied, several SEA members said that the change in health insurance payments was inevitable.

"It was going to open up anyways; we've got to pay something," said Kelley Dion, an employee for the Department of Health and Human Services in Berlin. "We're getting much better raises than we've ever gotten," added Dion, who lives in Lancaster and has worked for the state for 17 years.

As of this month, employees will get a 51-cent-an-hour raise, which translates to about $1,000 a year for a full-time worker. Wages will go up by 3.5 percent in January, and by an additional 5.5 percent the following year. The wage increases will bring state pay closer to private sector wages, SEA officials said.

"It's a dose of reality on the state's part with wages, since we're so far behind," said Stephen Whipple, a Department of Transportation employee who has worked for the state for nearly 32 years. Whipple sees numerous job vacancies: "We can't attract people; that's where the wages came in."

As for health insurance, "it's a dose of reality for us," said Whipple, of New Boston, who pointed to the high cost of coverage. "I think it's a fair deal."

Employees who use state insurance will begin contributing $25 per pay period, or $50 a month, to their health coverage. In 2009, that amount will rise to $30 per pay period, and the co-payments for visits to primary care providers will go from $5 to $10.

But for other state employees, the idea of paying a portion of their health insurance costs proved a deal-breaker. Several employees said they accepted comparatively low wages because of the state's stellar benefits. And agreeing to pay for a portion of their health insurance, however small, would lead to future increases, they warned.

"Once you open that door, it never closes," said Susan Lavin, a Department of Transportation employee who has been with the state for 19 years. "They're not really offering us the amount of money that would offset what we're going to be paying in for our co-pays and insurance."

Single page