After hiccup, Hopewell Council sets insurance rates

April 17--HOPEWELL -- Hopewell city employees almost didn't have health insurance for the coming year.

A normally routine procedure ran into unexpected difficulties last Tuesday night when City Council members initially failed to second a motion to set the upcoming year's health insurance rates for municipal employees.

A last-minute attempt by Mayor Jackie Shornak to second the motion was challenged by Ward 6 Councilor Brenda Pelham, who argued that the mayor is not allowed to second motions.

As the situation hung in limbo, City Manager Mark Haley told Council, "If you don't approve the health rates, we don't have health insurance."

While City Attorney Stefan Calos began searching Council rules, Ward 5 Councilor Janice Denton broke the deadlock by seconding the motion, allowing discussion of the issue to continue.

In fiscal year 2017, the city employed 366 full-time employees eligible for health insurance, many of whom also enroll their families in their plans.

Insurance rates rose 3.8 percent this year, an increase that Haley described as modest. Nevertheless, under a cost-sharing split proposed by city administration to distribute the increases between employees and the city, the rise will cost Hopewell an additional $148,700, according to a figure cited by Haley in his April 4 budget presentation.

Councilor Jasmine Gore expressed concern about setting the rates April 11 because such a decision would lock the city into assuming responsibility for a particular portion of the rate increase.

"The rates are going to change, but we can't make the decision to supplement that right now if we haven't adopted the budget," she said.

Haley and Assistant City Manager Charlie Dane, however, argued that it is normal for Council to set the rates before approving a budget, with Haley saying, "This is exactly the same script we follow every year."

Health care rates were presented to Council on April 12 last year, although meeting minutes do not record a Council vote on them. The budget was not approved until May 3.

Part of the expense of the increase will be offset by the discontinuation of contributions the city has historically made to insurance for the spouses of employees who retired from the city before Jan. 1, 2004. Beginning July 1 of this year, those contributions will no longer be made, although spouses will be permitted to remain on the city plans. Affected individuals were notified about the termination during the last budget cycle.

Currently 32 spouses receive such contributions from the city. The estimated savings of the discontinuation is $100,000, producing a net increase in insurance costs for the city of about $50,000.

Despite the earlier hiccup, the new rates were passed by Council unanimously.

--Sarah Vogelsong may be reached at svogelsong@progress-index.com or 804-722-5154.

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