Oconomowoc council OKs plan to offset increasing insurance costs

kbeck@conleynet.com

OCONOMOWOC — Health insurance costs are increasing for the city of Oconomowoc, but the Common Council approved a plan Tuesday that would reduce the financial burden on city employees.

Like many municipalities, Oconomowoc gets the insurance it offers to its employees through the state of Wisconsin’s Public Employers Group Insurance Program. A memo to the council from Tony Posnik, director of Human Resources, said the city joined the state’s health plan in 1997 after consecutive years of double-digit insurance premium increases. Since the city’s participation, it "has saved money, minimized the consecutive double-digit increases, and benefited in recruitment and retention from being with the state."

However, under the current traditional plan, significant increases are forecasted for city employees. The 2024 cost for a city employee is $271.20 per month, but in 2025, the cost would be $389.38 per month, a 43.58% increase or $118 more per month.

The city’s cost for providing health insurance in 2024 was $2,949,332, while the 2025 cost is expected to be $3,209,624, an increase of $260,292 or 8.83%.

To help minimize the cost to city employees, Posnik proposed, and the council approved, changing the city’s health plan to the P14 Deductible HMO-Standard, meaning the city would include a $500/$1,000 deductible plan with employer-funded Health Reimbursement Account. As a result, city employees would not need to pay for their deductible. And if the employee does not meet their deductible, then the city would save that money that would have otherwise gone to pay it.

Thus, the city costs are reduced. The 2025 annual cost is now projected to be $3,063,627, an increase of $114,295 or 3.88% compared to the 8.83% increase it was looking at.

For employees, the cost in 2025 would be $362.23 per month, an increase of $91 per month or 33.57%, which is significantly less than the original forecasted increase of 43.58%.

When it comes to attracting and retaining employees, Posnik said the city’s pension plan and health insurance are two key tools.

"Any changes to our health care benefits would negatively affect recruiting and retention," he said, adding the city doesn’t pay anything for vision, dental or disability insurance.

In other meeting news:

The council approved awarding a construction contract for Well No. 8 Pumping Station to Hunzinger Construction Company, which submitted a bid of $7,957,000. Included in the resolution is a 10% contingency for a total project award of $8,752,700.

Louie Fest at the Dockhounds Stadium, 1011 Blue Ribbon Circle North, was also approved. It will run Sept. 20 to 22 and include live music, carnival rides, showing of the Packers game on the big screen and food and beverages.