Gloomy Outlook for 2010 City Employee Healthcare
By Carl Wagenfohr
CLEARWATER - The City of Clearwater last week completed its process of evaluating proposals and recommending a 2010 employee healthcare benefit package for City Council approval. The outcome created no joy among city staffers.
Because the city has shown no loyalty to its incumbent insurance carrier, hopping from United Healthcare in 2007 to Aetna in 2008 to CIGNA in 2009, several major players in the health insurance industry chose not to make a proposal this year. Blue Cross Blue Shield of Florida, for example, wrote in their no-bid letter, "(BCBSF) is respectfully declining to provide the City of Clearwater with a proposal this year due to carrier persistency - three (3) carriers in three (3) years."
The city was ultimately able to secure bids from United Healthcare and CIGNA, but with steep increases in premiums to maintain current benefit levels. CIGNA's proposal included a 14.7-percent increase in premiums that would cost taxpayers an additional $1.6-million, while United offered a 17-percent $1.8-million increase.
With the City Council having budgeted for no increase in healthcare insurance for 2010, the city's agent negotiated contract proposals that would offer reduced benefits at the current premium level. CIGNA's proposal was again better, providing less of a reduction in benefits than United's.
The city's Employee Benefits Committee met on October 12 behind closed doors, and voted to recommend CIGNA's same-benefit proposal while asking the City Council to split the increased cost with employees. Human Resources staff disagreed with the Benefits Committee, recommending that the City Council approve the lower-cost, higher-deductable CIGNA proposal.
The staff-recommended base plan would increase the annual deductable from $750 to $2000 for an individual, and from $1500 to $4500 for a family. The annual out of pocket maximum would likewise increase from $3000 to $4500 for an individual, and from $6000 to $9000 for a family. The base plan is provided at no cost for employee-only coverage, and with premiums of $182.82 for employee+1 and $385.03 for employee+family coverages.
The employee cost of the so-called "Buy-Up" plan that has no deductibles would increase dramatically. An employee's monthly contribution for employee-only coverage would rise from $88.83 to $222.68, while family coverage would increase from a current $622.27 to $1015.20.
Steve Sarnoff, President of the Communications Workers of America local that represents the city's general workforce, equated the proposed benefits package to a "1985 Yugo that barely runs, if it runs at all." He is concerned that his constituents will shift to the base plan because of the increased "Buy-Up" premiums, and that those in the base plan will be discouraged from using their medical benefits at all because of the high deductibles.
Sarnoff will be making an appeal to the City Council tonight to dip into reserves and reduce the base plan deductibles by 50-percent. Representatives of the city's other labor unions can be expected to make similar requests.
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