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Contracts have more city workers paying into insurance

Savings to Wauwatosa expected to add up

July 20, 2011

Members of three city employee unions will see changes to their health insurance benefits that will have them paying toward premiums and deductibles.

The changes come following the passage of the state's budget bills, even though Wauwatosa doesn't participate in the state health insurance program.

The city had reached agreements with the dispatcher, clerical and public works unions that called for an increase in health care insurance premium contributions from 3 percent to 10 percent, for an annual savings of $162,000, City Administrator James Archambo said. However, those contracts weren't ratified by the Common Council.

Now that the budget-repair bill limits bargaining to wages for all non-police and -fire unions, city officials are ready to make changes to benefits that could help narrow the $2.3 million budget gap anticipated for 2012.

In addition to increases in health insurance premiums for three groups of active employees, the Common Council on Tuesday approved requiring nonprotective city workers who were hired between Sept. 1, 1991 and before Jan. 1, 2008 to pay 5 percent toward their premiums in retirement and the city to offer only one health plan beginning next year.

Parity is a goal

The nonrepresented employees already saw a health insurance premium hike to 10 percent earlier this year. This brings more employee groups in line, lessening potential for compression issues in which a supervisor is paying more than the employees that work for him.

"This shows the council's consistency with the message that we're trying to treat all employees with some parity," said Eric Meaux, council president. "This is one big step toward that intent to provide parity among all those employee groups."

Still, the premium changes - as well as the state-imposed 5.8 percent contribution to the pension plan - doesn't impact about 50 percent of the city's employees at this point, Archambo said.

City officials have made it clear that they have been bargaining with police and fire unions to provide comparable concessions. Those negotiations are in arbitration and there has been little movement lately, Human Resources Director Beth Aldana said.

"We'd like to have one more follow-up meeting with the unions before entering final arbitration," she said.

Policy restructured

It's possible that if the protected employees don't agree to similar pension contributions the city could find more money through higher deductibles.

Alderman Peter Donegan voiced interest in the possibility of setting different deductible levels among employee groups during an Employee Relations Committee meeting last week.

The council approved one Health Reimbursement Account insurance plan for all employees, even police and fire, starting in 2012. Modifications in the state budget bill give municipalities the ability to make plan design and provider changes, so only premiums can still be negotiated as far as health benefits go, Aldana said.

Deductibles would be $1,000 for singles and $2,000 for families. The city will contribute half the deductible amount in the HRA, and the employee the remainder.

HRA plans tend to result in more efficient health care spending, because the insurance holder is spending his or her own money, Archambo said. Making this change should keep health care costs flat next year.

The HRA plan was set up last year but only nine people - including Aldana and Archambo - signed up for it.

A change to the retirement plan benefit should result in up to $726,000 in savings over 33 years. Employees hired before Sept. 1, 1991 are grandfathered in to full health insurance premium reimbursement, and those hired in 2008 or later will receive a maximum 50 percent share. Nonrepresented employees hired in between will pay 5 percent of their premiums, an amount also on the table for the police and fire unions.

Next step

WHAT: Finance Director John Ruggini will give the Budget and Finance Committee a quarterly budget update plugging in the impacts of the state budget bills such as the pension and health care premium contributions

WHEN: 8 p.m. Tuesday

WHERE: City Hall, 7725 W. North Ave.

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