Fort Lauderdale employee health premiums skyrocketing [Sun Sentinel]

Dec. 26--FORT LAUDERDALE -- The new year is bringing sticker shock to city employees, with some of their health insurance premiums scheduled to quadruple.

City officials said they were forced to raise the rates because of a sharp increase in large claims to its self-insurance plan administered by Cigna.

Family HMO coverage for a general city employee will go from $81.90 biweekly to $271, an annual of increase of $4,917.

"The health insurance is out of control in the city," said John Sherman, business agent for Teamsters Local 769 that represents the city's general employees. "A lot of [the employees] are very upset because of the amount they're going up."

Sherman said the union has been meeting with city officials to come up with some plan that would ease the burden on the employees. It will make a proposal next month, he said.

The increases apply to all city employees except police, who officials said are self-funded through a Fraternal Order of Police plan.

The city said participant claims have been rising at an annual rate of 12 percent the past three years. In the latest fiscal year, there were $22 million in costs while city, employee and retiree contributions only raised $18.23 million. That created almost a $4 million shortfall.

The city has been using health plan reserves to offset the increased claims, but that is no longer an option, officials said. The city's actuarial firm projects there will be an 11 percent increase in medical claims and a 7.5 percent increase in prescription drug claims this year.

"It just finally caught up with us," said Mayor Jack Seiler, indicating the past rates were artificially low. "We're doing our best to try to balance the interest of the taxpayers with the interest of the city employees."

City spokesman Chaz Adams said the city hasn't increased the premiums in three years. Sherman said that could be part of the problem. If the city had put in small increases earlier, there wouldn't be such a drastic hike now.

"The way that this has been managed, it has been managed poorly," Sherman said.

The city created a health plan task force that evaluated the plans and recommended new options to help control costs, officials said.

The city has started a new low-cost health option, a consumer-driven health plan. Under that plan, the city will place $750 for an individual or $1,500 for a family into a health-reimbursement account, officials said.

The health insurance premiums vary with the three classifications of employees covered and the city's contribution. Individual premiums are $84 biweekly for management employees, $96 biweekly for general employees, and $118 biweekly for firefighters. The family rates go from $239 to $335 biweekly.

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