Some Lexington council members aren't happy with insurance changes

council member decries lack of incentives

bfortune@herald-leader.comOctober 22, 2011 

Urban County Councilman George Myers

HANDOUT PHOTO

Council member George Myers has sent an e-mail to Urban County Government employees saying he was "as shocked as you are by the mayor's new insurance rates," a sentiment echoed by three other council members Friday.

Myers urged city employees to contact Mayor Jim Gray and ask for a public meeting where they could question the mayor about the new health insurance plan — which would substantially increase premiums — and tell him the financial hardship it will place on their families.

"The mayor's new plan is neither balanced nor just," Myers said in the email.

Myers advocates setting premiums that reflect risks associated with individual lifestyle choices like smoking, obesity and lack of exercise.

"Those who make poor lifestyle choices, and are responsible for a disproportionate amount of the claims, should pay a higher premium ... rather than imposing static premium increases on every individual and family," he said.

Myers indicated he was disappointed that incentives to encourage changes in behavior were not included in the proposed health plan.

Council member Kevin Stinnett said that with the city's lean budget and stagnant revenues, there are no easy answers. Still, "It is not realistic to think our employees can afford these rates," he said in response to a question from the Herald-Leader.

Stinnett said he was searching for financial data to determine whether the extent of the rate increase was justified. "I don't think we should be pointing blame at anybody. I want to spend my time finding solutions," he said.

Pam Brandenburg, president of the Civil Service Employees Association, said she had sent Gray a request on Friday for a public meeting with employees to listen to their concerns.

"I can tell you I have never been so seriously considering options as I am right now," Brandenburg said. She declined to elaborate on those options.

Council member Jay McChord said he supported a town hall meeting where employees could ask questions and "have some of their fears allayed. Anything to knock down the anxiety employees are feeling would be a positive measure," he said.

Many employees understand there needs to be increased premiums, McChord said. "But to look at potentially almost 100 percent increase, and give people two weeks to understand and come to grips with that, that's the part that's unfair," he said.

Myers said Gray should have started six months ago to educate employees about the increases.

City spokeswoman Susan Straub said Friday that the city did not have the final insurance rates until mid-October: "We tried to find ways to reduce costs to employees right up until our deadline."

Open enrollment for employees is Nov. 7 through Nov. 27. The new coverage takes effect Jan. 1. "The council has been aware of the time table," she said.

Gray sent his own letter to employees on Friday saying the city had been transparent about its financial challenges with multiple public presentations to council about rising health insurance costs.

Without changes in the health insurance, the city faces losing $14 million in 2012, Gray said. If the government continues "excessive spending on employee health insurance, there will be more employee layoffs or significant tax increases. I cannot justify a tax increase during the longest and deepest recession in modern history," he said.

Some council members were involved in putting together the 2012 health insurance plans. "It is disingenuous for anyone to now express shock and disbelief about these changes," Gray said.

Council member Peggy Henson said she did not think the health insurance offerings were very well thought out. "There should be at least one plan that is reasonable, and there's not," she said.

Stinnett said employees knew increases were coming, but it was the extent of the increase that was stunning. Under the city's current plan, "The average civil service employee paid either nothing for single coverage, or $389 for a family," he said. "Now they are going to pay $277 for single coverage, up to $975 for a family. Those are huge increases."

Those amounts are after payment of $356 a month that non-union employees receive to offset the cost of health insurance or other benefits.

Unionized police, fire and corrections employees receive more. "Fire and police paid only $14.26 a month after the benefit pool money kicked in. Now you're asking them to pay $600 for police, $700 for fire," Stinnett said. "So you see why they're upset."

Information packets were scheduled to be distributed to employees on Friday. Gray said there would be opportunities for employees to get individual questions answered one-on-one to help them choose a plan best suited for their family.

Reach Beverly Fortune at (859) 231-3251 or 1-800-950-6397, Ext. 3251

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