After Lexington city employees protested outside, then packed the Urban County Council's chambers Tuesday, the council committed to spending $1.9 million to buy down a proposed increase in health-care rates for the employees.
The council agreed to hold rates for six months to the rate employees are now paying for the Platinum Plan, in which most of the employees are enrolled.
That means employees will not see an increase in costs until at least June 30.
"We are talking about what comes out of their paycheck, keeping that amount the same," said council member Kevin Stinnett, who introduced the resolution.
All 15 council members at the work session voted for the measure.
On Wednesday, several council members will meet with Mayor Jim Gray and the city's health-care consultants to discuss how to keep the rates the same, and what the benefits will look like.
Under an overhauled health insurance plan presented to the council at its work session last week, the monthly premium for a single employee enrolled in the Platinum Plan — in which 89 percent of the city's employees, including police, fire and corrections, are enrolled — was set to increase from $356 this year to $633 beginning Jan. 1. Families who stayed in that plan would have seen their premiums go from the current cost of $745 a month to $1,330.
Each employee gets a pool of benefit money from the city that they can apply to their health insurance costs or other benefits each month. Non-union employees get $356 a month to use to offset the cost. Employees in police, fire and corrections bargaining units get more.
Exactly where the cash-strapped city will come up with the $1.9 million was not spelled out.
"We are in a bad recession, and there's no fat in our budget," Gray said after the meeting. "We've been considering options to improve health insurance, but we are going to have to cut someplace to pay for those changes."
A new wellness clinic the city is opening early in 2012, which employees may use for primary care services, is expected to yield some savings in health care costs its first year of operation. How much remains to be seen.
The council chamber was filled to capacity during the work session, mainly with police and fire employees and members of their families, who earlier in the afternoon had protested the increased health care costs in front of the Government Center. An overflow crowd watched the meeting from television monitors set up in the first-floor lobby.
The decision to hold the line on a rate increase came after three hours of passionate discussion by police and fire employees, civil service employees, council members and executives from Benefit Insurance Marketing, a consulting company hired by the city to find solutions to hold down the city's escalating health insurance costs.
Finally, Vice Mayor Linda Gorton said, "Our employees can't absorb these costs. ... We cannot do this to our employees."
Grappling with rising health care costs is painful for everyone, Gray said, but the city was $35 million over budget in health care over a three-year period. "That is the problem we inherited," he said.
Pam Brandenburg, president of the Civil Service Employees Association, said after the meeting, "I applaud the mayor for all his hard work. He was handed a problem that was 20 years in the making and, essentially, told to fix it in one year." She thought her 600 members would be "very happy" with the council's decision to hold down the rates.
Chris Bartley, president of Lexington Professional Firefighters Local 526, also indicated his members would be supportive.
About 100 people, some with red picket signs, turned out in front of city hall to protest the rate-increase proposal.
The protest was organized by Lexington firefighters, but others — including 911 employees, police, sanitation workers and city retirees — waved picket signs and blocked the sidewalk.
"As bad as the fire fighters have it, civilian employees have it worse because we have not had a raise in six years," said Brandenburg.
The picketers drew honks and cheers from motorists; Occupy Wall Street protesters, who have set up camp just down the street for the last several weeks, drew colorful signs in support of firefighters.
Several firefighters said they feel especially slighted because the firefighters union recently made concessions that included a pay freeze and less overtime, and the city will pay $100 less per firefighter for health insurance.
The rally was the first time firefighters have organized in front of city hall since 2004, when they were petitioning for collective bargaining.