St. Louis police regain lifetime health insurance. City officials are alarmed.

ST. LOUIS — City officials are scrambling after another surprise from the bill that returned city cops to state control — and one that could cost taxpayers tens of millions of dollars.

Police and union officials said this week that the new law restoring the governor-appointed Police Board included a provision reinstating a decades-old — and costly — benefit for upcoming department retirees: lifetime health insurance.

The provision is expensive, said Paul Payne, the city's budget director, and no other city employees get it. The city had been trying to phase it out under local control.

“It’s a major deal,” Payne said on Wednesday.

The news marked the latest revelation from a law that also mandates more city spending across the department, changes to officer discipline and even restrictions on who can be the chief.

Mayor Cara Spencer, who sits on the new police board, cast it as yet another consequence of a law written by a few Jefferson City lawmakers and lobbyists that city officials ultimately couldn’t stop.

“Though the City has not yet felt the financial impact of this particular provision, we are concerned about what that will be in the future,” she said in a statement late Wednesday afternoon.

Joe Steiger, business manager for the St. Louis Police Officers Association, which supported the state takeover, said the provision was justified.

“We’re one of the lowest paid police departments in the region, and our officers do a dangerous job,” he said. “You’ve got to have some way to recruit people, right?”

Neither Gov. Mike Kehoe nor State Rep. Brad Christ, the sponsor of last year's bill, could be reached for comment.

It is a benefit other large departments in the region don’t have. St. Charles County offers its retired officers health insurance, but they have to pay premiums. And St. Louis County police officers don’t even have the option, said Matt Crecelius, business manager for the county police union.

He called the perk the best part of the city's retirement package. “You have lifelong health care,” he said. “That’s a huge benefit.”

The issue came up this week, as the St. Louis Police Board considered a resolution to match benefit packages for civilian employees hired during city control of the board with those hired under state control.

City officials asked if the resolution would restore the old retiree health benefits.

Chris Graville, the attorney to the Board of Police Commissioners, said it wouldn't — the state law already had.

The takeover law has already produced a couple of unheralded consequences since it was passed by the GOP-led Missouri Legislature and signed by Kehoe in March.

Over the summer, a close reading revealed a prohibition on hiring police chiefs from outside the department’s ranks — just two years after the city hired Chief Robert Tracy, the first chief recruited from outside St. Louis in the department’s more than 200-year history.

A week later, it became clear the law also reinstated a special disciplinary process long favored by the police union but opposed by city leaders, who said it allowed troubled officers to avoid accountability.

But the return of lifetime retiree health insurance — a benefit eliminated for officers hired since late 2013 — is the first surprise with a price tag.

City records trace the original mandate to provide medical and life insurance benefits for retired commissioned officers and civilian employees back to the 1960s. State law said then that the police board “shall provide health, medical, and life insurance coverage for retired officers and employees of the police department.”

Under that mandate, the city covered insurance premiums for retirees who met service thresholds: officers of any age with 20 years of service; civilian employees between ages 55 and 59 with 20 years of service; and civilians age 60 or older with at least five years of service. For retirees eligible for Medicare, the city paid the cost of a supplemental plan.

Retirees paid premiums only for family members, not themselves.

The benefit was costly. City budget documents show expenditures nearly doubled between fiscal years 2000 and 2004, reaching $12 million — about 9% of the department’s main operating budget that year.

It was also fiercely defended. When the police board raised deductibles, co-payments, and coinsurance limits for retirees on no-premium plans, the police officers association sued, arguing the changes violated state law.

The Missouri Supreme Court agreed. While the justices differed on how generous the coverage had to be, a majority agreed retirees were entitled to meaningful health insurance without paying premiums.

When City Hall wrested back control of the department in 2013 after winning a statewide ballot initiative, officials eliminated the benefit for new hires, noting that no other city employees received such a package.

The city continued paying benefits for those hired under state control, budgeting about $14 million for the current year.

But officials expected those costs to gradually decline as no new beneficiaries were added.

The most recent city audit put total liability over time — before the state takeover — at $413 million.

But Payne said that will jump if the people hired under local control are added, and the annual budget cost will increase steadily over time.

Robert Tracy was the first outsider to lead St. Louis police. He may be the last.

The law behind the state takeover of St. Louis police includes language that says the chief and assistant chief have to be “members of the force.”

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