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Committee reviews fire-department requests on retiree health, opt-out pay and insurance options
Summary
Following a visit from the fire department, the personnel committee discussed requests to lower the retiree-health eligibility age, opt-out incentives, a three-tier premium structure and whether to move from self-insured coverage to the state plan; staff outlined estimated costs and constraints.
The Franklin City Personnel Committee reviewed employee suggestions for the city health-insurance plan after a representative from the fire department raised several requests during a prior meeting.
Lieutenant Pulaski had asked the committee to consider allowing earlier access to retiree health insurance for firefighters — lowering eligibility from age 53 to age 50 for employees with 25 years of service under the Wisconsin Retirement System (WRS). Staff presented rough cost estimates showing that providing retiree health insurance for an additional three years for a retiree would add roughly $64,000 per person over the projected retirement period; staff also noted that each retirement-year cohort can represent a substantial multi-year liability.
Staff described alternative approaches raised in the discussion. One was an opt-out payment for employees who waive city coverage; staff estimated the city already has 54 employees waiving coverage and that implementing an opt-out bonus at roughly $3,000–$4,000 per person could cost in excess of $200,000 annually to extend the incentive to all who waive coverage. Committee members said adopting such a step would require budget trade-offs.
Committee members also discussed a three-tier premium option (single, couple, family) rather than the current single-or-family structure. Staff cautioned that, for a self-insured plan with a small population, shifting tiers can shift cost responsibility unpredictably and may not correlate with actual high-cost claims. Staff noted that most high-cost claims in recent years were for employee and spouse cases, not children, and that adding a couple tier could increase costs for other groups.
The committee considered whether to move from the city’s self-insured arrangement (with stop-loss coverage) to the state health plan. Staff described the city’s stop-loss structure and reported that the stop-loss threshold has increased over time (from roughly $50,000 in earlier years to about $100,000 currently). The stop-loss premium for a family plan was cited as about $310 per month; staff said the city’s PPO premium is currently roughly $2,400 monthly for a family unit. Staff also cautioned that joining the state plan could trigger an experience-rating surcharge; because the city has had recent high-dollar claims and stop-loss recoveries, staff said the state plan could add roughly 30 percent to premiums for the city, making the state option unattractive at present.
Committee members agreed that many of the insurance items are collectively negotiated with the fire union and that staff would provide the committee’s response and the cost breakdown to the fire department representative who raised the items.
