Oklahoma City Council defers retiree health care action

Oct. 26--The Oklahoma City Council on Tuesday deferred for two weeks action on two proposals to curtail retirees' health insurance benefits.

The changes would create two classes of employees for the purpose of allocated health insurance costs.

One proposal eventually would end the city's practice of paying a portion of retirees' health insurance premiums, shifting the entire weight of those costs to retired employees.

The other would require some current employees to work longer and would raise the age limit before they qualify for retiree health coverage cost-sharing.

Finance Director Craig Freeman said there is a $400 million gap between the resources necessary to fully fund long-term retiree health liabilities, as they currently stand, and present funds.

He said the city has relied on a pay-as-you-go approach to fund its annual contribution to retiree health insurance costs.

The fiscal 2017 budget includes nearly $16 million to cover those obligations, Freeman said. The figure is projected to increase to about $30 million in 10 years, he said.

The issue arises amid complaints by some retirees who have not yet qualified for Medicare and who face increases of up to 56 percent for their health insurance starting Jan. 1.

Personnel Director Dianna Berry said open enrollment for 2017 has been extended until Nov. 18 as city leaders seek ways to lessen the impact of those increases.

John George, president of Fraternal Order of Police Lodge 123, and George Fina, who represents retired firefighters, asked for a delay.

Ward 4 Councilman Pete White proposed a two-week delay and the council agreed 7-2. Mayor Mick Cornett and Ward 1 Councilman James Greiner voted against deferral.

The city council voted in 2009 to reduce to 50 percent from 70 percent the share of retirees' health insurance premiums it pays, a goal that is expected to be reached in the next couple of years.

Freeman said the city now is proposing to no longer offer to pay a share of retirees' health care premiums for employees hired after Jan. 1, 2017.

A second measure would set new limits on eligibility of some current employees to take part in the city's health plan cost-sharing.

Currently, employees who reach age 55 with at least five years' of service can qualify for cost-sharing benefits.

Under the proposed tightening of eligibility rules, current employees would need to reach age 60 with at least 15 years of service to qualify.

Those qualifying for full retirement would remain eligible to take part in the city's health plans -- police and firefighters after 20 years of service and others after 25 years.

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