ALBANY — In the end, after a prolonged discussion that raised about as many questions as it answered, the Albany City Commission decided Wednesday to cover its employees in their group insurance plan under the option that takes the smallest bite out of the employees’ paycheck.
By a 4-3 vote, the commission approved “Option 1A,” which will mean no employee insurance cost increases for those who are covered under the plan’s base package. That leaves the city to pay all but about $600,000 of the projected $3 million shortfall the plan is expected to generate.
The commission also OK’d an amendment that will cap under-65 retiree increases at 15 percent, a measure that will cost the city an additional $67,606.
The city is already dealing with a $3.1 million shortfall between its actual Fiscal Year 2013 costs compared to the amount it budgeted for the coverage, a disparity Human Resources Director Henry Cohen said was primarily attributal to 21 catastrophic claims (of more than $75,000) paid during the fiscal year.
“You can’t reasonably foresee 21 catastrophic claims; it was a unique situation,” City Manager James Taylor said. “No one can project that kind of thing.”
Ward II Commissioner Ivey Hines, as he had at a special meeting called last week to consider the insurance plan, asked the board to approve Option 1A, which will leave the city to cover more than $2.5 million of the projected shortfall. Ward IV Commissioner Roger Marietta, also as he had last week, asked for and received approval to add the retiree option to the motion.
Ward V Commissioner Bob Langstaff pointed out that, with losses figured into the equation, the city over the past couple of years has been paying 80 percent of the insurance plan’s cost, more than the goal of a 75-25 employer-to-employee split.
“Option 1 or 1B actually gets us closer to that goal,” Langstaff said. “I favor one of those options, because at the end of the year, you can’t go back and increase premiums on employees to make up the difference.”
Option 1 would have had employees contributing $476,566 of the additional cost, while Option 1B would have had them pay $248,690 of the cost. A fourth option, labeled Option 2, would have required employees to pay $1.2 million of the additional costs.
Hines, Marietta, Ward II Commissioner Christopher Pike and Mayor Dorothy Hubbard voted to approve Option 1A, while Langstaff, Ward VI’s Tommie Postell and Ward I’s Jon Howard voted against.
“I still don’t think we’re doing enough for our employees,” Postell said. “I’d like for them not to feel like they’re getting the shaft.”
Howard asked Taylor if eliminating the wellness program from the employees’ plan would lower the overall cost.
“If we could think outside the box and change the mindset of our employees in a matter of the next few years, and we decided not to have our wellness center would we be having discussions like this (in the future)?” Howard asked.
Taylor said doing away with the wellness portion of the health plan would actually increase costs.
“In the long-term, wellness programs have proven to lower insurance costs,” the city manager said. “I can’t give you any numbers, but my answer is that without a wellness program, we would probably have more costs. (Continuing the wellness program) is the right thing to do. It’s the smart thing to do.”
Cohen said more than 97 percent of the 1,082 city employees participating in the group plan had signed up to participate in the risk assessment evaluation of the city’s wellness program.