MuskogeePhoenix.com, Muskogee, OK

Local News

May 22, 2013

City health plan costs may go up

Muskogee city councilors will consider next week a proposal to increase contributions to the employee health benefits plan.

A proposal reviewed Tuesday during the Finance Committee meeting lays out a plan to increase contributions by 18 percent beginning July 1. Co-payments for brand-name prescription drugs would increase 25 percent, from $40 to $50 and implants would be included in the dental plan.

The increased contribution would cost the city, which pays 100 percent of the cost of coverage for employees, an estimated $542,000. The city’s share of the annual contribution — expected to total more than $4.27 million — would be about $3.55 million, and the employees’ annual share for their dependents would be about $726,945.

Presently, the city contributes $561.64 a month for health insurance coverage for each of its 485 employees. Under the proposed plan, the city’s monthly contribution would increase to $662.74. Employees with covered dependents would increase from $355.33 a month for a spouse and two children to $419.29.

The proposal, which has been recommended for approval by a committee made up of representatives from all employee groups, was offered as a way to keep the self-funded plan solvent. Administrators reported last year at this time the plan had accumulated an $800,000 deficit, but adjustments made since then have erased much of that shortfall.

“It fluctuates from month to month, but I’m thinking we are down,” City Manager Greg Buckley said of the shrinking deficit due in part to increased contributions approved last year. “I know we have made improvements that I am happy with — that doesn’t mean we don’t need to continue to adequately fund the plan to make sure we stay solvent.”

Personnel Director Kelly Epperson said since contributions were increased almost a year ago, the health benefit plan’s deficit has shrunk to about $293,000. By July, the deficit had fallen to $631,865 and decreased another $10,600 by December.

“Hopefully, we’ll be able to increase that into the positive,” Epperson said about the balance sheet for the city’s health benefits fund. “The committee is recommending this. I will bring this ... to council next week.”

Dan Hurd, a American Federation of State, County and Local Employees Local 2465 member who serves as chairman of the union’s contract negotiation team and on the health benefits committee, said most employees appear to be receptive of the proposal.

“I think if we try to do this again next year, there may be some push back from the unions,” Hurd said. “They understand that if there is no increase this year they would be pushed into the open market, and they know that would cost more.”

Union representatives challenged efforts last year to raise employee contributions for dependent coverage, saying the issue was an item that must be negotiated.

City Attorney Roy Tucker opined later that prevailing practices, the city’s collective bargaining agreements with the three employee groups and case law tended to support an argument for unilateral changes without negotiation. No unfair labor complaints were filed after city councilors approved contribution increases.

City councilors will consider plan amendments that would take effect July 1 when they meet at 7 p.m. Tuesday.

Reach D.E. Smoot at (918) 684-2901 or dsmoot@muskogeephoenix.com.

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