Lexington council will pay $3.8 million to offset city employees' health-insurance premiums

bfortune@herald-leader.com, jkegley@herald-leader.comOctober 28, 2011 

Lexington's Urban County Council voted Thursday to pay up to $3.8 million in 2012 to offset an increase in health-care rates for city employees, despite an unsatisfied audience of employees and uncertainty from the council about where the money would come from.

The council decided to provide $1.9 million from Jan. 1 to June 30, in the city's 2012 fiscal year, and $1.9 million for the rest of 2012. The council agreed to the funding during a work session Tuesday, and it studied the issue for two days; members outlined how the money would be allocated.

Beginning Jan. 1, when the new insurance plan takes effect, an extra $75 to $200 a month will be given to employees. The supplement may be used only to pay for health coverage.

The supplement was suggested as a way to buy down the cost of a new health plan that angered many city employees. Under an overhauled health insurance plan presented to the council at its work session last week, the monthly premiums would have doubled under some plans.

Mayor Jim Gray said the city was committed to giving employees a supplement. However, he said, "We don't know where the $3.8 million is coming from." The city budget already had been slashed for the 2012 fiscal year, with each department cutting its spending by 10 percent.

Council member Kevin Stinnett said adding the supplement "is not perfect, but it's a step in the right direction." It will "soften the burden" on employees.

Those who addressed the council Thursday were not satisfied.

"You have got to do better," said Pam Brandenburg, president of the Civil Service Employees Association, which represents 600 non-union employees. She sang a verse of You Lift Me Up during her address.

"The people are going to have to quit or go on welfare or go out and become criminals. They could go work for a pharmacy and steal drugs and sell them," Brandenburg said.

Employees were angry that the new equivalent to the Platinum Plan, in which 89 percent of the city's employees are enrolled, would still cost several hundred dollars more a month.

The equivalent to the Platinum Plan still has no deductible. Its cost compared with the Platinum Plan was set to increase from $356 a month this year to $633 a month next year for single employees. Families who stayed in that plan would have seen their premiums go from the current cost of $745 a month to $1,330.

With the new supplement plus an existing benefit pool of $356 to $530, three of the five plans that will be available to employees at the start of the year will cost them the same as or less than the premium for the existing Platinum Plan. The cheapest plan will cost nothing out of pocket.

To give employees more time to study the plans and make their choices, the start of open enrollment was moved to Nov. 14 from Nov. 7. It closes Nov. 27.

The city health insurance plan covers about 6,400 people, including employees, dependents and retirees.

Gray has said that without changes in the health insurance plan, the city faces losing $14 million in fiscal year 2012, Gray said. The city had been $35 million over budget for employees' health insurance in the past three fiscal years; in fiscal year 2011 the city spent $33 million after budgeting $22 million.

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

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