Frustration with city employees’ health insurance is mounting
Published Friday 11 November 2022 18:48
The rising cost of health insurance is the source of frustration for unions representing Austin city workers, but it’s still only part of a bigger picture that union officials believe is cornering workers.
During Monday night’s City Council meeting, members voted broadly to approve the 2023 Health Insurance Agreement (MOA) for the eight unions representing the city’s workers.
The vote collapsed 5-1 on all eight resolutions, with Councilor Joyce Poshusta being the only dissenting vote.
The crux of the decision, however, is that union officials, including Fireman Tom Schulte, representative of International Association of Firefighters Branch 598, felt the decision put them in a corner of accepting or rejecting the MOA and higher bonuses as well payable as a loss of a $215 monthly opt-out payment the city currently has.
“With this MOA, what the city did, we’re not spending that $215, which was a contractual deal,” Schulte said. “We’re not paying out the $215 anymore and you have to switch to this high-deductible plan, which is a maximum of $12,000 for a family and $6,000 for singles.”
At the same time, however, the city found itself in a bind when it received late news in September of a 31% rate hike from the Public Employee Insurance Plan (PEIP). The city itself rejected the PEIP plan and looked around, eventually settling on a plan from Medica, which, while having no idea, Schulte said, was better.
To make matters worse, the city had already finalized its budget for 2023.
“They gave us an extension on September 30th… an expected increase of 31%,” City Manager Craig Clark said. “Medica was the most compatible but still had increases. We have worked with the council on the proposed plan and budget parameters. We held meetings with unions and city employees to discuss the new plan options.”
“We don’t care either,” Clark added. “That’s the reality of the healthcare world.”
Schulte argued that no one was arguing against the schedule or the Medica plan itself. The biggest concern is the perceived unwillingness to work with unions to lower premiums further. Schulte brought the case before Monday night’s City Council meeting in hopes of creating another opportunity to discuss the process, but the council instead chose to proceed with the vote, although it should be noted that during the meeting no discussion could take place.
However, there is also a possibility that coverage based on Medica’s parameters may be lost altogether.
“But now Medica says – if you’re a public body, you have to have at least 50% of the employees in the plan,” Schulte said. “Right now Austin is at 54%. If we lose 10 more people, we will no longer have insurance coverage.”
According to Schulte, the city wanted to take the opt-out money, $215, and reallocate it to the Healthcare Savings Account, which is similar to a flex account.
This new plan increases the annual HSA/HRA contribution to caps of $2,000 for singles and $4,000 for families annually, and while this may seem like a good thing to employees on the surface, it effectively robs employees of a say in what they do with that money should do.
Something Schulte said he had a plan for.
“What we had suggested was to take the HSA money and it’s already been set aside to shove it around and put it back into rewards,” he said. “That would give the employee the ability to make those decisions about how much they want to contribute to HSA, and it would lower the premium cost so I’m taking less money out of my pocket unless I’m putting it in there.”
Schulte also argued that the move would help with recruitment and retention. It would be more of an incentive to stay in Austin than to go to other communities with better opportunities.
“We’re looking at other entities: Freeborn, Owatonna, Fairbault … their individual coverage is free,” Schulte said.
Although Schulte said he hopes that an agreement can be reached for 2023, the fact is that the schedule is working against the entire process. Clark takes a similar view.
“Those are pretty tight deadlines,” Clark said. “It wasn’t anything special this year. Importantly, we’ve attempted to communicate to staff that we need to make a decision on the MOAs in order to be able to offer the third plan. Of course, in the design plans, we try to limit the burden on employees with higher monthly costs.”
Clark also agreed that the issue needs to be revisited.
“Fifty-four percent of employees use city health care. We need to address that,” Clark said, but argued there was a need to abolish the opt-out. “It was prudent to remove the opt-out and move it to the city’s HSA post.”
Still, the trial itself left a bitter taste, and Schulte said he hoped their views could be given a little more consideration.
“What I don’t like is how it was leveraged and how it was used,” Schulte said. “I understand they had a deadline. Basically what I was trying to say is that nobody is arguing about the plan itself. What we have tried is a redistribution. All we asked was that the city reallocate (exit) funds from HSA funds and add them to the bounty to make it palatable to a family and entice an individual employee to participate in the plan.”