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Friday, May 24, 2024

Saffo and Rivenbark lobby for insurance policy change to benefit one employee

In 2010 the city stopped offering health insurance benefits to its retirees, but now one employee has requested an ordinance change. Several council members asked questions surrounding the reasoning and the potential cost of the new plan.

WILMINGTON — The City of Wilmington’s City Council on Tuesday will consider changing who is eligible for the city’s retirement health insurance benefits, a program that is not even available to anyone hired after 2011 currently.

But one city employee is hoping to add his wife to his retirement insurance, even though she failed to adhere to city policy. The policy in question requires a dependent looking to get onto the city’s insurance after retirement first have been carrying the insurance for at least one year while the main benficiary was employed.

A resolution is being brought forward to City Council by Mayor Bill Saffo and Councilman Charlie Rivenbark that would make it easier for dependents of city employees to receive health coverage after an employee retires.

The resolution would remove the ordinance stating that any dependent who wishes to be covered under the city’s health plan after retirement must have participated in the health insurance for at least one year.

“Passage of this resolution to modify the plan document will result in the one-year dependent participation requirement being removed from the city’s health insurance plan, allowing employee dependents within the eligibility window to file for coverage as a part of the retiree’s health insurance benefits,” according to City Manager Sterling Cheatham.

But at a City Council agenda briefing on Monday morning, members of City Council had some questions, specifically, just how much is this going to cost taxpayers?

For the good of one

Council members questioned the motion and requested a cost analysis be presented to council before approving any sort of changes.

Councilman Kevin O’Grady asked how many different employees would be affected by the change, and what the cost would be, since there was no information presented in the resolution on either topic.

But according to city staff, a cost analysis had not been done. There are unknowns when trying to determine cost, but there will be other dependents who did not take advantage of city insurance in the past, meaning there would be “hypotheticals” with regard to cost

O’Grady also asked what the motivation of the proposal was.

“Can you tell me why we are motivated to change this? I mean, wasn’t that the term of employment and now were going to change that?” O’Grady said.

The item was brought to the attention of members of City Council after a retiring employee realized his spouse was not eligible for the city’s health insurance since she was not covered by the plan prior to retirement.

But those rules have been in effect for years, and the change is aimed directly at an individual, meaning city leaders could be changing a longstanding ordinance for the benefit of one.

The proposed change is specific only to employees who were hired by the city prior to 2007 and plan on retiring after March 1, 2018.

“So you are saying that this is for one individual, we are going to change the policy? Were they at any point counseled prior to retirement?” Mayor Pro Tem Margaret Haynes asked.

If the motion were approved, even if a dependent never carried city insurance, after an employee retired, they would still be eligible to retirement benefits.

How it works currently

In an effort to save the city and taxpayers money, in 2010 Wilmington voted to do away with the Employee Healthcare Plan for retirees, making the proposed amendment even more specific as to who it would benefit.

An example of how much the city pays for its retirees health care plans (Port City Daily photo/COURTESY CITY OF WILMINGTON)
An example of how much the city pays for its retirees health care plans if hired post 2009 (Port City Daily photo / COURTESY CITY OF WILMINGTON)

The proposed change could have costly ramifications for the city and its taxpayers, since the city’s portion of insurance paid is dependent on the total time an employee worked for the city.

For employees hired after 2009 and before the cutoff of 2011, the city would pay 85 percent of a health insurance premium if the employee worked for the city 25 years. Employees hired before 2007 would have 100 percent of their premium paid for if they worked 20 years for the city.

Employees of the city hired prior to 2007 and the amounts paid for health insurance (Port City Daily photo/COURTESY CITY OF WILMINGTON)
Employees of the city hired prior to 2007 and the amounts paid for health insurance (Port City Daily photo / COURTESY CITY OF WILMINGTON)

There was also a concern that former employees who abided by the rules and were unable to add a dependent to their retirement insurance policy, or had their spouse on for at least a year prior to retirement might ask for reimbursement.

City Council will meet Tuesday in City Hall to vote on the matter.

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