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Woodfin staff propose health-subsidy changes and 2.8% COLA; council asks for trade-off scenarios
Summary
Staff recommended a hybrid health-insurance subsidy to reduce family premiums (proposed extra $600 for employee-plus-child/spouse tiers and $1,000 for family) and a 2.8% cost-of-living adjustment (COLA); council members asked for comparisons and options tied to tax-rate choices and pay adjustments.
Sherry Powers and Shannon presented a multi-slide analysis of health-insurance and compensation at the May 26 budget work session and proposed a two-part approach: a modest COLA and revised dependent subsidies to blunt recent premium spikes.
Shannon said health premiums have risen markedly in recent years and described a hybrid subsidy model that preserves a solid base plan while adding a targeted subsidy to make family coverage more affordable. "What we're proposing is $600 for employee-plus-child and employee-plus-spouse categories and $1,000 for employee-plus-family," Shannon said, explaining that the town would increase its share of dependent coverage to lower employee out-of-pocket costs. Staff emphasized this move aims to keep base-plan coverage strong while limiting the burden on households carrying family premiums.
On pay, Sherry recommended a 2.8% COLA tied to the CPI-W (the index used for Social Security) and compared that proposal to peer municipalities: the state-sample average was roughly 2.9% and some neighboring towns are proposing slightly different amounts. Sherry noted that a small COLA increase (from 2.8% to about 3%) would raise the overall budget by only several thousand dollars but council asked for side-by-side scenarios and the fiscal impact of alternative COLA choices.
Council discussion focused on equity and recruitment. One council member asked whether offering family coverage through the employer would reduce eligibility for marketplace subsidies for lower-income employees; staff said they had not run comprehensive marketplace-impact modeling but noted that family coverage take-up is currently low among employees and the town already offers pretax payroll deduction via a Section 125 cafeteria plan, which reduces employees' taxable cost.
What happens next: staff will provide comparative scenarios (2.8% vs. 3% COLA, and alternative subsidy mixes) and estimate budget impacts; any final plan will appear in the FY2027 budget ordinance and associated packet materials.
