City to hike employee insurance contribution

Nov. 17--A year of high medical insurance claims is causing Logansport officials to increase how much city employees will contribute to their benefits in the future.

Logansport Clerk-treasurer Stacy Cox said at a city council finance committee meeting Wednesday night that the city's health insurance claims this year are driving up 2018's projected costs to $2.9 million. The city budgeted less than $2.3 million for the expense, she added.

City Councilwoman Teresa Popejoy said employees pay about 5 percent of the cost of the city's medical insurance plan, adding a more logical amount is between 15 to 30 percent.

Cox said the current ratio was established long before the current administration took office.

"...[T]he buck has just been passed and the can has been kicked down the road for years," she said. "So now we are forced to take a 5-percent contribution rate to more like 15 or 20 with the rest of the world and we're going to feel a whole lot of hurt from that because it hasn't been adjusted."

Officials decided they want to see employees' contribution eventually rise to 20 percent. How fast it gets there was the source of some debate.

"If we have to go $500,000 or $600,000 into our general fund reserves to offset the cost for another year so that we can get this thing in control, I'm not opposed to raising it a reasonable amount," City Councilman Dave Morris said. "But I would rather run a negative budget next year than tell our hundred and however many employees we got that this is what they're facing. It's not right."

Morris went on to propose increasing employees' contribution from 5 percent to 6 percent next year.

That would take a single employee's medical insurance contribution from $14 per pay period to $19.36 per pay period, Cox said.

The same kind of employee is charged about triple that at Logansport Memorial Hospital and the Logansport Community School Corp. for the same service, Popejoy said.

"Nineteen dollars of pay is not a realistic number for employees to be paying for health insurance," she added.

Popejoy proposed increasing city employees' contribution to 10 percent next year.

But Morris pointed to the family medical insurance rate for city employees, which at 10 percent would mean paying an extra $1,500 next year. That's too much, too soon, he said.

"I'm just saying that I think as a city in order to take care of our employees the way they need to be taken care of, we can give them a year," Morris said. "Do I think 10 percent is an unreasonable rate? No, but I think the time frame we're doing it in is."

City Councilman Matt Meagher said while officials are accountable to city employees, they're also accountable to taxpayers.

"We're not running a private company, we're running a city," he said. "We take that money out of the general fund, that's money we're not using for the other 18,000 citizens. So, I apologize to the employees but we got to do the unpopular thing."

Council members met in the middle of Morris' and Popejoy's suggestions by deciding to raise the employee contribution to 7.5 percent next year with the intention of eventually reaching 20 percent in the future.

Officials also discussed parting ways with their current insurance provider and joining a health insurance trust that spreads costs over a large pool of members, which would be beneficial for Logansport in a year of high claims like the one it's experiencing.

Leaders are also considering further savings for the city by no longer offering insurance to retirees who retire after the end of this year.

Reach Mitchell Kirk at mitchell.kirk@pharostribune.com or 574-732-5130

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