City Employees May Bear Increased Cost of Health Benefits
by Carl Wagenfohr
CLEARWATER - The final shoe will drop on the Clearwater's 2007/08 budgeting process when the Council will decide on the city employee health care benefit program. But unlike prior years, the Council is poised to select a plan not recommended by the city's employees.
And, for the first time in recent history, the Council had directed the City Manager to formulate a plan that results in no increase in city costs. The city's cost of employee healthcare had escalated from $4.7-million in 2000 to $11.2-million in 2006 and $12-million in 2007.
The city uses an Employee Benefits Committee to consider health care alternatives and evaluate benefits packages proposed by vendors. The committee's 15 members represent the city's several unions, retirees, plus management, supervisory and professional employees. The Benefits Committee process saves the city from negotiating separate health care benefits with each of the labor unions that collectively represent the majority of city employees.
The committee first considered a proposal from the city's current provider, United Health Care, to renew with a 12-percent premium increase and a reduction in benefits for the least costly of the several alternative plans proposed. The benefits committee decided to release a Request for Proposal rather than accept lesser coverage or burden employees with the additional cost.
Bids were received from United Healthcare, Humana, BlueCross BlueShield of Florida and Cigna. Aetna, a carrier characterized by the city's Healthcare benefit consultant Kurt Gehring as aggressive in the public sector market, did not submit a bid.
Of the final bids, Humana offered a plan costing $15,639,524, an increase of $540,524 or 3.6-percent over this year and the lowest responsive bid. United's proposal came in at $16,307,009, an increase of $1,208,009 or 8-percent. Both Cigna and BlueCross submitted proposals with 13-percent increases.
Because of the Council's directive that the city would spend no more on employee healthcare for next year's plan, any premium increases would be borne by the employee. Humana's proposal offered employee savings ranging from $18.46 for a single employee to $52.24 for an employee plus family on the Standard HMO plan. In addition, Humana offered a more attractive base plan for which a single employee contributes nothing.
All tangible things considered, Humana offered a better solution, but the Benefits Committee recommended United by a vote of 9-6. Their recommendation came with a caveat, however, that the city should cover half of the increased cost.
During Monday's worksession meeting, the City Council, while not unsympathetic to the plight of its employees, were not of a mind to pay any more for healthcare. Only Councilmember George Cretekos was willing to contribute more, but not to the extent of splitting the cost increase with employees as they requested. Mayor Frank Hibbard, directing his comment to union representatives, said, "I know this is not necessarily a decision you want to hear, but I appreciate you collaborating with us."
The Council will vote tonight on awarding the 2008 healthcare contract to Humana.
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