- By Marcia E. Lynch
- News
Print 
The County Personnel Committee Thursday presented proposed alternatives for modifying retiree health insurance coverage, as the County looks at ways to bring ever-increasing health benefits costs under control.
In a two-hour work session, the committee reported on results of analysis begun early this year by two work groups. The aim, administrators say, is to reduce costs for both the County and for subscribers, especially Medicare-eligible retirees who under the current system subsidize the cost of health insurance for others in the County’s health insurance pool, even though Medicare is their primary provider of health benefits coverage. The meeting room was packed with a number of retirees, as well as union officials affiliated with bargaining units of the County, the Tompkins County Public Library and Tompkins Cortland Community College, whose members are covered by the County’s health insurance program.
Presented were four proposed options, with the recommended alternative to shift all County retirees (both Medicare-eligible and non-Medicare-eligible) to an alternate program and from the traditional plan used by most retirees and current employees. County Administrator Steve Whicher called this new Comprehensive Value Plan a “very good package at a reasonable cost that the County can afford to maintain.” It would require increased expense by the subscriber at the time of service, but would be projected to decrease the retiree pool’s total annual premium costs by nearly $150,000 and the County’s premium share by more than $120,000.
Other retiree health insurance alternatives would include leaving the current health insurance plan and structure in place, which Administrator Whicher cautioned would become “unaffordable” to the County; a retiree-proposed option of creating a separate experience-rated group for all Medicare-eligible retirees, projected to cost an extra $500,000 a year to cover the remainder of those insured by the County; or to offer, but not mandate, the Comprehensive Value Plan for current retirees. Under this option, new retirees as of the beginning of 2008 would be enrolled in the revised plan. That option, however, is not projected to produce an immediate impact, and financial savings are said to be uncertain.
With health insurance premiums rising two to four times faster than salaries, health benefit costs are the primary driver in the increase in County fringe benefit costs, and Finance Director David Squires cautioned that new financial reporting requirements which take effect after next year also will require that the County include in its financial statements the value of post-employment benefits provided to current employees, which, he said, will create a “significant unfunded liability” for the County. Greater cost-sharing for retiree health insurance, he predicted, would produce significant benefit.
Retirees and others in attendance raised many questions about the cost projections presented and concerning the recommended approach, including why administrators are seeking changes now, rather than waiting for a new collaborative health benefits program for Tompkins County municipalities to be developed. Administrator Whicher responded that, while a New York State Shared Municipal Services Incentive grant to investigate and develop such a program has been awarded, the project is only in its beginning stages and if the County waits as long as three years to make a change, it could cost as much as $1.7 million dollars, with significant impact on the County’s tax rate.
Retirees including former County Administrator John Murphy and former county Benefits Manager Louise McEwen, both of whom had been involved in the benefit review process, maintained that, with Medicare as the primary insurer, Medicare-eligible retiree claims amount to only a small portion of the County’s health insurance expenses. Former Administrator Murphy said that moving Medicare-eligible retirees to a separate pool would produce a “very significant benefit” for those retirees at a small increase in premium cost.
Long-time Legislator Frank Proto recalled that many current retirees were hired by the County at a time when salaries were much lower that at present, with the expectation of good ongoing benefits, and he suggested that factor should be taken into account. Legislator Martha Robertson pointed out that the real struggle concerning the health benefits issue is national, not local, related to the health insurance system in which the County is forced to operate.
The Personnel Committee will resume examination of retiree health insurance at a meeting scheduled for September 4th. Although it is possible that the committee could reach a recommendation at that time, committee chair Jim Dennis said it is possible that discussion will continue beyond that time.
----
v3i32