More Former Employees On City’s Health Insurance Plans

The Jamestown City Council will vote later this month on approving two companies to handle the new health care subsidy program aimed at removing Medicare-eligible retirees from the city’s self-insured plan.

On Monday, Sam Teresi, Jamestown mayor, said there are more retired former city employees on the city’s health insurance plan than current members of the government work force. Around 300 retirees are on the plan, which costs the city government $2.2 million a year, Teresi said.

The current health care benefits for retirees was originally put in place, and largely still intact, through legally approved and protected collective bargaining agreements with the various city employee unions dating back to 1987.

Teresi said earlier this year that the state Financial Restructuring Board for Local Governments approved $1.5 million in funding to the city to start the new health care subsidy program for Medicare eligible retirees. He said the program is similar to a health care savings account, which will pay the premiums on the new supplement programs.

Joseph Bellitto, city comptroller, said city officials received four proposals and have selected two companies that will be used to offer the new subsidy programs — Northwest Financial Services to offer a Blue Cross Medicare plans and Arcade Financial Services to offer United Healthcare Medicare plans. He added no checks will be given directly to retirees who select to participate in the program, but instead their Medicare subsidy premium payment each month will be subtracted from an account with an allotted allocation for each retiree. Once the allocation is depleted, the retiree would then pay for monthly premium costs.

How much of an allocation for each participating retiree depends on the union they belong to and how old they are, Bellitto said.

As an example, he said a member of the American Federation of State, County and Municipal Employees local 418 or Civil Service Employees Association local 1000 who is between the age of 65-69 will receive a $17,000 allocation. He estimated, assuming 8 percent inflation, that a city retiree using this classification would have their Medicare subsidy premiums paid for four years and seven months before the allocation would hit zero.

Bellitto said, using the same classifications, a retiree who selects to participate in the program would save about $8,000 by not paying their current monthly premiums to the city self-insured plan during the same four year and seven month time frame.

City officials believe that 25-30 percent of retired former city employees will participate in the program, which will be first come, first served. City officials have estimated if they reach their estimated number of participants, they will save around $600,000 in health care costs in 2018. Bellitto said he believes the program will sell out quickly. Once the $1.5 million city officials received from the state is gone, the program will end.

“It is a solid win for the city and the individual, if they plan properly,” he said.

Bellitto said each retiree in the city’s self-insured health care plan will receive a letter this week describing the plan. He said there will be group presentations offered by the companies handling the new health care subsidy plans. Also, there will be opportunities for individuals to schedule a meeting about the new health care program.

Teresi said the meetings will be open so retirees can bring family members, financial consultants or an attorney. He said participation in the program is voluntary.