The health insurance deductibles for one group of city employees will now be a bit lower in 2012.
“The budget allowed it,” City Administrator Henry Veleker said of the change in how much these employees will pay toward their deductibles next year.
The health plans approved by the Common Council on Nov. 1 call for deductibles of $2,000 for employees on the single plan and $4,000 for those on the family plan.
Under the current health plan, all city employees have deductibles of $250 for individuals and $500 for those on the family plan.
In 2012, there will be one plan for employees who contribute to their pensions and a separate plan for police officers, who are not contributing to their pensions.
Police and firefighters are exempt from the state’s new requirement that all state and local employees contribute 5.9 percent toward their pension.
For the employees contributing to their pensions, the amount they have to pay toward their deductible in 2012 has been reduced.
Instead of having to pay $500 toward a $2,000 deductible, those on the single health plan will pay $375 toward their deductible.
City employees on the family plan will pay $750 toward their $4,000 deductible instead of $1,000.
The $500 and $1,000 figures had been approved by the Common Council on Nov. 1.
Veleker said that during meetings with employees on Nov. 3, the one comment that kept surfacing was the fact that in 2012, the plan year will be for nine months instead of 12.
The plan year will begin on Jan. 1 and end on Sept. 30. The city will then move the beginning of its health plan year to Oct. 1 of each year to coincide with its budget.
While next year’s plan will be for nine months, subsequent plans will be for a full year.
Veleker said having nine months in next year’s plan year puts some employees at risk of meeting their deductibles within that time and then starting a new deductible during the same year.
Pro-rating the deductible was not an option, he said.
“The only other option was funding a little more of the HRA (Health Reimbursement Arrangement). After the employee meetings, we looked at the numbers again,” Veleker said.
The reason why this group of employees will pay a portion of their deductibles is because the city will fund an HRA for them. After employees pay the $375 and $750 respectively toward the deductibles for individual and family health plans, the HRA will then cover the rest of their deductibles.
In a Nov. 11 memo to the Common Council, Veleker said, “Assuming 75 percent or fewer of our insured employees reach their deductible, the city will still realize savings if we reduce the employee’s exposure to $375-single/$750-family. In speaking with Mayor (Brian) Smith, the administrative decision was made to do so.”
The city will only fund an HRA for those who participate in the city’s wellness program.
Once deductibles are met, there will be 100 percent in-network coinsurance.
“The change was very well received by the employees,” Veleker said. “There was anxiety about how quickly we had moved on this. The council needed to make a decision before we took it to the employees. That was the rationale in moving as quickly as we could.”
For the city’s police officers, there will be no change in their deductibles.
The city is not funding an HRA for the police, and they will continue to pay the full amount of the $2,000 deductible for individuals and $4,000 deductible for those on the family plan.
And, after reaching the deductible, police officers will then have an 80/20 in-network co-pay on their medical bills.
Lisa Benitez, president of the city’s law enforcement association, said, “As the discrepancy in employee deductibles grows, I am reminded of the mayor’s words, ‘It’s all about negotiation,’ and yet health insurance is no longer negotiable according to Mr. Veleker (which is correct).
“I am also reminded of Administrator Veleker’s words, ‘Our goal is to instill a little fairness across the city organization as far as what employees contribute. This is what we feel is fair. I know the police feel they are being singled out.’ The retirement contribution? It stays the same; very much less than the ‘fairness’ being doled out by the city of Waupaca.”
Veleker said if the non-represented police elect to contribute 5.9 percent toward their pension, “they can get on the (other) plan, too.”