In response to concerns raised by countless city employees, retirees and citizens about possible health care benefit changes, the proposed 2018-19 fiscal year budget for the city of Independence will have some notable revisions.
In a late Friday afternoon release, Mayor Eileen Weir said City Manager Zach Walker will present a series of budget amendments at Monday's City Council meeting, which promises to be packed yet again with citizens and employees.
The proposed budget had called for pre-age-65 retirees shifting from an 80-20 employer-employee premium split to 50-50 over the course of three years. Many of those changes will be reversed, the mayor said, and about $1.3 million will be reduced from the general fund.
Weir also tried to explain that post-65 retirees are not being completely removed from the city's health care plan, and the Staywell employee health care clinic will not be eliminated. She said conversations with employees, retirees and the city manager's staff “have proven to be productive.”
As initially proposed, the health care changes would save the city $7 million annually, addressing a projected $3.6 million shortfall in the general fund. The first reading of the proposed city budget is at Monday's meeting, and the second reading and vote is scheduled for June 17.
“I am grateful that our City Charter allows for 45 days between the budget proposal and budget adoption, including a full public hearing,” Weir said in the release, “so that citizens can provide information and ask questions that assist the City Manager and the Council in making appropriate adjustments.”
Employee premiums are still scheduled to go up 8 percent, which after four years of no increases hasn't caused much grumbling, and the city has an 80-20 split with employees on premiums. All employees will still receive a 1 percent wage increase unless otherwise negotiated in work agreements.
Other key health care points in the proposed budget include:
• Bidding the coverage for post-65 retirees, who are covered by Medicare, to Blue KC for supplemental group Medicare coverage.
• Encouraging employees to shift from Plan 1 to a higher-deductible Plan 2 that would also include a city-funded health savings account of $1,000.
• Shifting the StayWell clinic to a third-party provider.
Weir said she wanted to make clear that the budget doesn't remove post-65 retirees and dependents from the city's health care plan, as many have believed. They can still participate in that if they choose, and the proposed Blue KC plan will be administered by the city. A new committee will be formed to provide representation for retirees who want to participate in the city's plan.
As for the employee health care clinic, she said the city will explore ways to enhance services, increase usage and become more financially sustainable.
“The proposed Medicare supplemental plan simply adds a different vendor to the city’s health benefit offerings, at a cost savings to the retirees and the city,” Weir said.
Walker said the Medicare supplement plan is similar to the active employee insurance program and projects to lower monthly premium costs from $115 to $39, due to volume buying power.
Weir noted that the city is not recommending a number of measures other entities have taken in reducing personnel costs, such as benefits for retirees, spouses, dependents and domestic partners are not being eliminated, and the city has not issued wage freezes and furlough days.
“The escalating cost of health insurance is a reality in all industries,” she said in the release. “I am acutely aware of measures other cities around the state and across the nation have taken to reduce health care expenses.”
Walker first presented the budget at the May 13 meeting and hosted a town hall meeting on the budget two days later, and the council had a full public hearing on the budget at the May 20 meeting.