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Council tables proposed change to employee health contributions after split vote
Summary
South Lebanon council debated whether to shift full HSA/employer contribution costs onto the city and ultimately voted to table Resolution 2026-14 for more information on costs and neighboring municipalities’ offerings.
South Lebanon — The South Lebanon City Council debated and then tabled Resolution 2026-14, a renewal of the city’s high-deductible health insurance plan and the city’s contributions to employee health savings accounts (HSAs), after council members split over whether to have the city cover the full employer contribution immediately.
The measure, presented as a second-reading renewal of a high-deductible health plan with continuing employer HSA contributions, drew questions about timing and budget impact. One council member proposed striking the employee contribution portion so the city would cover the full amount, but other members and staff said that change was not budgeted for the current fiscal year and would require running the numbers and revising the resolution for a subsequent reading.
City finance staff explained the plan’s effective date (August 1) and described comparisons to a pooled Center for Local Government option that most neighboring small municipalities use. Staff said the city currently contributes amounts intended to reduce employees’ out-of-pocket risk (examples discussed in the meeting included employer contributions in the range of $1,200 toward a single-plan deductible and sample family deductible reductions). Officials noted trade-offs between offering a traditional PPO and a high-deductible plan: a PPO produces higher premiums for both employer and employee, while a high-deductible plan lowers premiums and pairs with HSA contributions that employees can carry forward.
After discussion, a motion to accept the resolution as written (without the proposed amendment to make the city cover full employee contributions) was put to a vote and failed. Council then voted to table Resolution 2026-14 to the next meeting and asked staff to return with comparative data on what neighboring communities pay, the projected per-paycheck employer contribution under different scenarios, and any budget adjustments that would be required to make the proposed change permanent.
Council members who opposed immediate adoption cited uncertain budget authority and the lack of current-year funding for a city-paid contribution. Members urging prompt passage said employees appreciate the new HSA contributions and that delaying could risk disrupting coverage during the renewal window; staff cautioned that changing contribution percentages mid-cycle may require a revised resolution and an additional reading.
Next steps: staff will compile the requested comparisons and cost estimates for the council’s review at a future meeting; the resolution remains tabled pending that information.
