Insurance major benefit for city workers

Published 5:00 am Thursday, September 4, 2003

Brookhaven employees enjoy a major benefit under the city’shealth insurance plan, a benefit that in some cases next year couldbe more than a worker’s salary.

According to an analysis of current and new insurance rates fornext year, a city employee with full coverage — health, dental andshort-term disability — receives an hourly benefit of $2.58 thisyear. With a recently-approved 24.7 percent increase for fiscalyear 2004, that benefit will go up to $3.24 an hour.

City Clerk Iris Rudman-Smith said the city pays all the costsfor full-time employees’ full insurance coverage. She said thebenefit is an effort to help offset lower salaries that someemployees make.

Dependent coverage is also available to family members for$54.94 per month. Aldermen have not discussed raising the employeecontribution for dependent insurance coverage.

“Everybody does not have dependent coverage and everybody doesnot have dependent dental,” Rudman-Smith said.

Overall, group insurance costs for the current year werebudgeted at an average of $8,750 per participating employee. Nextyear, based on the proposed budget and current participationlevels, the average cost will go to $10,894.

Insurance data for the current year shows 159 employees withhealth and dental insurance. Also, 96 have dependent healthcoverage and 98 have dependent dental coverage.

For an employee with full dependent coverage this year, theinsurance benefits package translates to an hourly wage of $5.36.With the scheduled increase next year, that benefit will rise to$6.77 an hour.

The routine starting salary for city employees is $6 a hour.There is a 60-day waiting period before an employee is eligible toparticipate in the insurance plan.

The 24.7 percent increase for fiscal year 2004, which startsOct. 1, is the second year in a row for an over-20 percentincrease. During an Aug. 7 meeting, aldermen voted to renew thecurrent plan instead of seeking new proposals or renewing withoptions that would have lowered the increase.

In supporting the policy renewal, Ward 5 Alderman Tom Smith saidpart of working for the city is having an insurance plan that takescare of them and their families.

“I think we need to look out for the employees,” Smith said.”They’re not paid enough money to pay this.”

Sylvia King, the city’s insurance agent, presented options thatincluded raising the employee’s deductible from the current $250 to$300 and raising the percentage that employees would be responsiblefor at in-network and out-of-network health facilities. One optionwould have resulted in a 22.7 percent increase while another optionwould have resulted in a 19.7 percent increase.

Rudman-Smith said the city’s policy was custom-written in thelate 1980s. King said the current policy is no longer offered tomunicipalities, and the number of city carriers in general is alsoshrinking.

“The number of carriers that will cover a city at all is verylimited,” King said.

It is unlikely the city could get the same coverage plan if thethe board chooses to seek new coverage. King also indicateduncertainty about rates.

“If the board wants us to bid it out, you have to take what themarket dishes out,” King told the board at the August meeting.

King said the group insurance business is very complicated. Shesaid there are a lot of factors that go into determining rates.

In addition to finding carriers, King cited high drug costs,health factors, claims and on-going medical conditions. Due toprivacy regulations, King was prohibited from discussing anyspecific cases related to the city’s insurance.

If a new carrier were sought, King mentioned the possibility ofa carrier offering a low first-year premium in order to get thebusiness. That could then be followed by a large increase thesecond year.

Some carriers also consider aldermen or council members aspart-time whereas Brookhaven aldermen are considered full-time andparticipate in the insurance plan.

“We’ve always had them full-time for insurance purposes,”Rudman-Smith said.