Managing Director Camille Barnett says the city will save $6.3 million annually by making some changes to health benefit plans offered to non-unionized city workers -- both upping the some out of pocket costs and shifting the way the city pays the insurance bills.
Employees will be notified of the new plan structure at 2 p.m. today by email and human resources personnel.
Barnett also said the city would like to achieve similar savings from the health benefits for the city’s 22,000 unionized workers -- but would not detail exactly what the city was looking for in contract negotiations.
“We are leading by example,” Barnett said. “This is a good way to save money without decreasing benefits.”
While employee monthly contributions will not change, the new benefits set-up will increase out of pocket maximums for the 6,900 workers and retirees in the city program, who are on three different plans from Independence Blue Cross. Some unionized workers are also on the city-administered plan.
In addition, the city is shifting to what is known as a “self-insured” plan, meaning that instead of paying a per-member amount to Blue Cross each year, the city pays the claims directly, as well as administrative costs. This means if the city expenses come in lower than expected, the city keeps the difference. The city will also purchase “stop loss insurance” that would help protect them against high claims.
Currently, each of the city’s four municipal unions has their own health and welfare trust and the city negotiates a per-member amount to pay into those funds each year. Most members do not pay a monthly contribution for benefits.
Attorney Deborah Willig, who represents both the firefighters union and white collar workers in AFSCME District Council 47, said the unions might consider using self-insured plans.
“If we could be guaranteed a savings of money, we would consider it,” Willig said. But she stressed that the unions would not consider giving billing authority to the city, which had also been proposed during contract talks.
Contracts for the four unions representing municipal workers expired June 30. So far, no new deals have been reached.
Because the police and fire unions cannot strike, their contracts are resolved through binding arbitration. The arbitration hearings have concluded for police and their contract award is expected soon. The arbitration hearings for fire are scheduled to extend into the new year.
Negotiating sessions for AFSCME District Council 33, which represents blue collar workers, and District Council 47, which represents white collar workers, have lagged since summer. They are expected to pick up after the police contract is announced.