Orange Beach votes to absorb health care deficit

City votes to pick up deficit for fourth year

Posted 11/1/16

ORANGE BEACH, AL – The Orange Beach City Council on Nov. 1 voted down a change in health insurance that would have caused significant increases for its nearly 300 employees.

An emotional …

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Orange Beach votes to absorb health care deficit

City votes to pick up deficit for fourth year

Posted

ORANGE BEACH, AL – The Orange Beach City Council on Nov. 1 voted down a change in health insurance that would have caused significant increases for its nearly 300 employees.

An emotional discussion ended with city agreeing to once again take a $400,000 loss in the city’s self-insurance program to keep the current coverage. Employees agreed to give up half of a yearly one-time payment for services – essentially but not legally a Christmas bonus – to help ease the city’s burden.

Officials estimate there will be a deficit of about $600,000 in health insurance in 2017. The employee one-time payment for services – the non-Christmas bonus – cost the city about $400,000.

The city will cut that in half – from $1,500 to $750 – to recoup about $200,000 of the amount and absorb the rest. Mayor Tony Kennon said during the upcoming year city officials will research health plans and present another plan before the end of 2017.

The city’s plan has been operating at a deficit, Financial Director Clara Myers said. With the Nov. 1 vote, that deficit will continue into 2017.

“The past three years we lost about $300,000 in 2014, $700,000 in 2015 and now we’re at about a half million year-to-date in 2016,” Myers said.

The decision was reached after more than an hour of discussion in a chamber flooded with employees. Sound was piped to the rest outside in the lobby and on the porch and lawn outside council chambers.

For the past three years the city has stuck with the same self-insured plan as allowed by new federal rules, Financial Director Clara Myers said.

“Because of the Affordable Care Act we were trying to keep the plan exactly the same until all aspects settled on that,” Myers said.