City to eat unsavory premium increase for Tiffin employees
TIFFIN– The cost of health insurance rarely goes down.
And once in a while, there’s a spike in premiums that really causes jaws to drop.
The City of Tiffin encountered one such moment recently, experiencing a 36 percent hike in the cost of health insurance for its employees.
At a meeting last Wednesday, Tiffin council members considered whether any of the increase should be passed on to workers.
In the end, the answer was no.
The new premium will cause about $14,000 in unexpected expenditures for the city, but City Administrator Michon Jackson indicated conservative budget estimates will cover the cost.
City employees currently contribute $100 a month to family health insurance premiums, with the city paying for the rest. The city pays the entire premium for employees with individual policies.
Because of the size of the premium increase, Mayor Steve Berner brought up the cost-sharing arrangement at a work session before the April 23 council meeting.
“I think that taxpayers here in town are contributing to their family health plans more and more every year,” Berner said. “I think the (city) employees should be doing that as well.”
Berner and Jackson proposed a possible change to the rest of the council, one that would require city employees to contribute 33 percent of future increases in family premiums, with the city picking up the remainder.
Jackson said the issue was brought before the council’s attention because it was such a large increase.
“I have enough in the budget to cover the full amount,” Jackson told council members. “We would be financially fine not making changes.”
If the council decided to pass on part of the increase, Jackson said, anything more than a few dollars would have a negative impact on take home pay, since only a two percent cost-of-living raise was included in the budget.
With only a cost-of-living adjustment and increased demands and responsibilities for employees, council member Joan Kahler said she would not support passing on the more of the premiums to city workers. “I feel we can cover it,” she said.
Michelle Wolter, an employee benefits specialist with AW Welt Ambrisco Insurance of Iowa City, was present for the meeting, and was questioned by council member Mike Ryan regarding the root cause of the increase.
Wolter said the introduction cumulative ratings through the Affordable Care Act was causing many premiums to spike. She said she expected costs to level out by 2016 after insurers have two years of experience with the new law.
Council member Mark Petersen expressed concern about absorbing the increase without knowing if health care costs will continue to escalate.
“Where’s the end going to be?” Petersen asked. “We have to come together again, and discuss this again and again and again?”
Wolter indicated the city has some ability to manage premiums through the modification of deductibles and co-pays, are both low in the city’s current plan.
Petersen argued the city could eventually get to the point that it couldn’t afford health insurance, but Ryan countered that there are already signs that health care costs are going down as a result of the national legislation.
“I think overall, we really don’t know,” Ryan said.
“For this year, I’m saying I don’t want to hit employees in the face with a shovel. Let’s get through this year. Let’s see what actually happens in the marketplace.”
With at least three council members supporting the idea of absorbing the extra expense, no formal action was taken by the council.
Residents to see $3 increase on utility bill
Council members did take action on the creation of a storm water utility which will tack on a flat $3 to each property owner’s monthly utility bill from the city.
The new utility will be established to provide funding and management of a municipal storm water drainage system to deal with surface and subsurface waters.
Council member Peggy Upton said she didn’t want the new utility to open the city up to added liability. “I don’t want people thinking that all their personal drainage problems are the responsibility of the city,” Upton said.
City attorney Crystal Raiber responded the city would not be creating exposure to additional liability through the creation of the utility.
The first reading of the ordinance authorizing the utility was passed unanimously by council members. Three council readings will be required before the ordinance can be adopted and enacted.
Council members approved the third and final reading of an ordinance modifying time requirements under the city’s Planned Area Development (PAD) application process;
The second reading of an ordinance amending the zoning map for Lot 5 of Willow Ridge was passed unanimously;
A resolution authorizing a storm sewer and drainage easement agreement with the Clear Creek Amana School District was approved.