CLINTON —
Escalating healthcare costs are getting the attention of city of Clinton officials.
Citing sustainability issues, officials are looking to change health insurance plans for some city workers.
By the looks of Council chambers at City Hall on Tuesday, the proposal has garnered the attention of several city employees.
A crowd of approximately 50 people gathered at City Hall to hear the fate of health insurance plans covering non-bargaining employees within the city of Clinton. The Internal Operations Committee proposed a plan that would increase deductibles from the current $250 for single and $500 for family, to $2,000 for single and $4,000 for family.
Under the committee’s plan, non-bargaining employees also would be required to fund a Health Savings Account.
A percentage, which has not been determined, would be taken out of each employee’s earnings to generate the account. The HSA is under the discretion of the employee, giving them options on how much they want to contribute.
City of Clinton employees have not contributed to premiums in the past.
Despite the changes, Councilwoman Jennifer Graf, at-large, said the city’s finances must be dealt with now.
“We need to make proactive decisions for future sustainability of this city,” Graf said.
Without comment from audience members, the committee moved the plan forward to the Clinton City Council Committee of the Whole, which will be held at 7 p.m. Tuesday.
Councilman Paul Gassman, ward 4, wanted to make sure information was available in time before a final decision was made.
“I think the city moves slow on things anyway, so I don’t want to delay on something that could be a time bomb,” Gassman said.
By using the high deductible and HSA accounts, the city would save more than $50,000. Health insurance costs go directly to residents’ property taxes. The savings do not include employees who are members of a union, which accounts for the majority of city employees. The city can ask union members to renegotiate contracts, but they are not required to participate in those discussions.
Currently, only firefighters are open for negotiations for next fiscal year, while all other union employees are on two-year contracts, which were recently approved.
The proposed changes for non-bargaining employees would be initiated Jan. 1, 2013.
“Who pays first is what needed to be changed first,” Finance Director Jessica Kinser said.
City Administrator Jeff Horne wanted to not only cut the cost to the city, but also slow down increases, which is why he did not suggest a flat percentage contribution. In 2012, the city had a 28 percent increase in health insurance renewal, and the cost per employee was $17,758 according to a cost/plan design survey. The industry average is $10,612. The renewal percentage also was higher than the national average of 4.9 percent.
Compounding the problem for city finances is an actuary report stating the city of Clinton is not meeting state code in reference to reserve funding for claims coverage. The city must fix the issue within the year.
“As far as I’ve heard around the office, we’ve never been in this position before,” Kinser said. “We need an infusion of cash in our health reserves.”
The city would set up and contribute to the HSA account for each employee, but after its initial set-up, the employee is in charge of spending the money using a debit card system. Funds accumulate year-to-year if not spent.
Employees also would pay the entire price for a prescription drug until the deductible was met, according to the new plan.
Numerous meetings will be held between Tuesday’s COW meeting and the next City Council meeting on Oct. 9, for non-bargaining employees who have sustained furloughs and frozen wages for the past few years.
“And now they bear the biggest burden of shift in health care,” said Graf, describing her frustration with the process.
Local News
September 19, 2012
City of Clinton’s insurance costs to shift
Non-bargaining city workers first to pay premiums, higher deductibles under proposal
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