By Benjamin Gohs
To hedge an increase in medical insurance rates, Charlevoix County officials passed a measure requiring all current employees pay 20 percent of their monthly premium—and discussed doing likewise with retirees.
This move will most affect employees hired prior to Jan. 1, 2005 because they used to enjoy fully-funded healthcare.
“How much research went into this?” said Charlevoix County Commissioner Larry Sullivan (R-District 6) during the Wednesday Nov. 13 meeting of the Charlevoix County Board of Commissioners.
“I have been talking to other entities and they’ve been—the road commission, for example, their premiums I think went up seven percent—talked to other organizations and groups and their insurance went up nowhere near what this has.”
Charlevoix County Board of Commissioners Chairman Joel Evans (R-District 4) said Charlevoix County Clerk Cherie Browe has done a lot of research on the matter.
“I can tell you, Larry, is when we were seeing seven to 12 percent increases, Emmet County saw 32 percent increase in one year and ours were minimal at that point,” said Charlevoix County Commissioner Chris Christensen (R-District 2). “I think this is just finally catching up to us because some of those people had already switched their plans. And, now that we’ve switched our plan, this is part of that catch-up.”
According to the Charlevoix County Board of Commissioners, Charlevoix County department heads held a meeting to discuss the proposed change with their employees prior to the Wednesday Nov. 13 meeting.
The change in medical insurance co-pays will not affect Charlevoix County Road Commission employees.
Sullivan said he saw paperwork in regard to the 13 to 17 percent average industry-wide increase, and Charlevoix County’s unusual number of claims as it pertains to medical insurance.
“I’ve been hearing some grumblings from some of the employees saying ‘We did not get a cost-of-living.’ (increase) And for some of them this is a big chunk,” Sullivan said. “This is another couple two to three grand a year.”
According to the county’s resolution, the county has paid the entire premium for all eligible active employees and their families hired prior to Jan. 1, 2005 along with 60 percent of the monthly premium for the dependents of those employees hired after Dec. 31, 2004, the employees hired after Dec. 31, 2004 have been responsible for the remaining 40 percent of the monthly premium.
Charlevoix County has 80 employees hired prior to 2005 and 30 employees hired after.
The county is looking at a 36 percdent increase in health insurance costs for 2014. However, the county only budgeted for a 15 percent increase.
According to county officials, If all the active full-time employees pay their new co-pay, there will be no additional cost to the county taxpayers for the health insurance premium hike.
Due to the substantial increase in the Health Savings Account premiums for 2014, the Charlevoix County Committee of the Whole recommended that all eligible active employees pay 20 percent of the monthly premium only.
The result is a change in the formula of all eligible active employees hired after 2004 to the same payment of 20 percent of the entire monthly premium instead of 40 percent of the cost of their dependents.
Officials say this will not change the deductible and co-insurance payment for each employee that is currently receiving this benefit paid by the county.
This change will take affect with the first full payment in January 2014.
Charlevoix County Human Resources Coordinator Kevin Shepard said the move stinks.
“The employees don’t like it and they shouldn’t like it but for all the conversations they understand,” he said. “They know friends and family outside of here, what they’re paying for healthcare and of course they all watch the news and they see what’s going on with our healthcare system. So, they don’t like it, they shouldn’t like it—but they understand it.”
Charlevoix County Commissioner Richard Gillespie (R-District 5) asked Shepard if it was fair to say the county had avoided making the changes to medical insurance co-pays as long as it could.
“For us to finally cost-share with a hundred percent of the employees—like I said, you don’t want to do it … but I think it’s time,” Shepard said.
Charlevoix County Commissioner Ron Reinhardt (R-District 3) mentioned the fact that the county has been funding health savings accounts for many of its employees—a move that was introduced in late 2011 to help employees avoid an increase in health insurance costs after Michigan Gov. Rick Snyder signed a law that requires public employees to pay for a percentage of their health care costs.
“The health savings accounts that we’re still paying—that was quite a raise, whether people want to believe it or not, it was quite a raise” Reinhardt said. “And, we’re just getting hit right now.”
Christensen asked why only active employees were bearing this burden and retired employees were not.
“The decision was made at management level that this was the most appropriate way to handle it based on assurances retirees were given at that time,” Christensen said. “I think it’s fair for discussion.”
There are approximately 60 retirees still getting benefits from Charlevoix County.
“Probably one of the best decisions this board made was back in ‘94 when you cut out retiree health benefits,” Shepard said. “That’s limiting our future liabilities in this area. And, I don’t want this to come out the wrong way, but that pool is going to continue to shrink and that liability is going to be gone. Whereas other municipalities that are just now adopting resolutions like that, they have decades and decades of unfunded liability along with these increase costs of healthcare.”
He added, “So, as far as that’s concerned, we’re in very good shape based on that ‘94 resolution.”
Evans said he feels everybody ought to be paying some.
“I don’t know what the procedure would be but even the retirees,” Evans said. “It doesn’t seem fair that those that are working would pay their full shot … and I think it’s something that we should look at.”
Christensen asked what the impact would be if retirees were to begin paying a portion of their medical insurance.
Evans said more research needs to be done on the matter.
The motion passed 4-2, with Sullivan and Charlevoix County Commissioner George T. Lasater (R-District 1) both voting “no.”