City to pass on health insurance increases?
Officials consider $20 co-pay with 1.5% pay hike
The Hartselle City Council is still eyeing a raise for all city employees, but it won’t be the three percent increase that it originally planned to give in next year’s budget.
Upon the recommendation of City Clerk/Controller Rita Lee and Human Resources Director Melee Laney, the council is considering an across-the-board 1.5 percent cost of living adjustment along with merit raises.
But the increase would come at a cost. Laney also recommended a $20 per month health insurance co-pay for each employee. Currently, employees receive full coverage at no cost to the employee.
Laney said that co-pay would help cover the rapidly increasing cost of health insurance.
“I’m an employee for the city,” Laney told the council Monday. “I wouldn’t want it to come out of my paycheck as well, but we have to look at what is best for the city.”
Council President Bill Smelser blamed the need for a co-pay due to the Patient Protection and Affordable Care Act, otherwise known as Obamacare.
“The cost of everyone’s insurance is going up,” Smelser said. “My insurance costs have been skyrocketing. I just don’t know if there’s anything else the city can do at this point.”
According to Laney and Lee’s numbers, the total payroll cost would be $6.976 million. When combined with the city’s operating budget, the city would spend $37,000 over a projected revenue of $10.513 million.
Councilman Kenny Thompson said he felt like the city should do its best to avoid passing along an insurance co-pay, but if the city had to, he wanted to make sure that the employee still saw an increase in take-home pay.
Thompson said the city should consider giving a 1 percent increase without merit raises. The city would still eat the increased health insurance costs, but the city would be in the black by nearly $40,000.
However, Laney said that the city should consider a small insurance co-pay this year to prepare employees for the future.
“I think we should have go ahead with an employee co-pay to help our employees adjust to having a health insurance co-pay,” Laney said. “I think that would be better than having to implement a $40, $60 or even $80 a month co-pay next year.”
Laney also recommended other changes to the council to help manage the 2014 budget:
• make department heads get council approval before filling vacancies for any position that has multiple employees.
• increase worker’s compensation training for supervisors and employees. The worker’s compensation rate increased slightly last year, but Lee said the number is still below one, causing the city to receive savings on its worker’s compensation insurance.
• increase supervisor training on eliminating overtime. The 2014 budget slashes the city’s overtime budget in half.