The city of Ravenna is eyeing some major changes to its health insurance in the new year.
But Mayor Joseph Bica said until the city is done negotiating with its labor unions, the changes, seen as a mechanism for helping the city resolve its budget crisis, will be delayed.
"We've made a decision that we're not going to penalize the non-union employees," he said. "All city employees are going to be affected the same way, whether positively or negatively."
In recent years, the city has taken many measures in order to resolve a persistent shortfall in its general fund. But since the unions representing the city's police, fire and other laborers have resisted some changes, they have been applied mostly to the handful of administrative staffers who aren't represented by the unions.
In the past, those changes have included "spousal language" which requires spouses of city employees who have other insurance available to accept it rather than enrolling in the city's plan.
Now, in the face of a $4.9 million loss in revenue in recent years, Ravenna is looking to implement health insurance premiums for the first time.
Through these and other budget changes, the city hopes to reduce its general fund shortfall to $273,468 in 2013 and $106,000 in 2014. Otherwise, Finance Director Kim Cecora has said, the city could be facing shortfalls exceeding $900,000.
Traditionally, city employees have paid no premiums for their health care, though they do pay for prescriptions and pay co-pays. Instituting premiums is something the city has been looking at for years, but officials were previously told that any changes to the plan would make the city subject to the Affordable Care Act.
Instituting premiums will have another added benefit -- allowing people who don't need the insurance to opt out of the plan. Previously, because employees paid no premiums, they were not able to decline the coverage.
Bica said the city is eying a premium of 10 percent of the COBRA rate, which amounts to less than $125 a month for families and less than $45 a month for singles.
"It's still a great plan," Bica said. "We can't continue to absorb the cost. There needs to be a balance."
A unique feature would "incentivize" dropping out of the plan. That means that if a city employee has access to other health insurance, he or she not only has the option of dropping out, but there would be a financial incentive to do so. That, Bica said, would offset the cost of the alternative health insurance, and help the city by removing people from the plan.
"The significant cost savings is in getting people off the plan," he said. "If it costs us, it's worth it in the long run."
The premiums and incentives also would apply to members of city council, but only if the unions sign off on them.
The city approved contracts last year with the Fraternal Order of Police, the International Association of Firefighters and the American Federation of State, County and Municipal Employees. However, the contract with the police included a "wage opener" for the following year.
Recently, a "fact finder" from the State Employment Relations Board recommended the health insurance premiums and the compensation for those who opt out of the coverage. However, it also recommends a 2 percent wage increase after years of pay freezes.
Bica said that if either side appeals the fact finder's recommendation, the matter will go to binding arbitration where a different arbitrator would make recommendations that both sides must abide by.
Bica said if wage increases are put in place for the police union, then those increases, too, would be across the board.
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