Board of Aldermen 3-24-2020 Page 5
The primary goal is actually to get people to switch to the high deducible because if you know somebody
on that plan you can benefit significantly. You get paid to be on the plan, and that’s $3,000.00 a year; you
have a $4,000.00 deductible, family deductible and pay very little after that. But the gap between what you
save in cash and the deductible is only $1,000.00 but it creates great incentives to try to ensure quality
care while at the same time paying more affordable rates for things like lab tests and things like that.
In any event, if you talk with people who have the high deducible plan right here in City Hall, some of them
have been able to accumulate thousands of dollars, $10,000.00 or more over a period of 5 or 6 years and
that is money that you can take with us to another employer or if you leave ultimately it is treated like a
retirement plan. So there’s a lot to be gained. But for those who stay with the HMO once the plan changes
are incorporated, their working rates would actually go down by 15%, meaning monthly amount would
come out of your check and would go down by about 15%. The changes are relatively simple; pharmacy
co-pays are increased from $5/$15 and $35 to $10 / $30 and $50, those are the deductibles. The major
increase is the increase in the deductible for the people who have in-patient hospital visits or out-patient
hospital or urgent care visits. Those deductibles would go from $250.00 for an individual and $500.00 for a
two person or family plan to $1,500.00 and $3,000.00 respectively. But again, this accomplishes two
things. First of all for the employees it encourages them to go to the high deducible plan, which even
though the title of it sounds very negative, it’s not. If you look into the details people really benefit from it.
There are certain groups of employees we have where 50% of the employees are on the high deductible
plan. Number two, even if you stay with the HMO’s your weekly deduction from your paycheck, the
employee’s paycheck would go down by 15%. And the City would also save money.
The reason | am mentioning this at length tonight is the enrollment period for the unaffiliated employees
and all employees is Mid-April, so if we are going to institute this we need to do it by the first meeting in
April, | know that we have limited Committee Meetings. There are other groups of employees that are
probably going to accept, at least one group of employees is going to accept this in the near future as well
through negotiations and | think it is something that we have to incorporate in all of our labor contracts.
In any event, | apologize for the length of this, Madam President, but again | knew that you are not holding
a lot of Committee Meetings and | think it is something that will benefit the City Budget as well as bring
working rates down and encourage people to move into a more advantageous plan, the high deducible
plan. So | am hoping the Board of Aldermen will adopt this within the month, in other words, two weeks
from now. And | wanted to give the details so people would hear about it because of limited committee
meetings or if they are remote or if people can’t attend those meetings.
In any event, thank you for your indulgence, Madam President. That concludes my remarks.
President Wilshire
Thank you Mayor. Did | hear you say that you don’t need this until our second meeting in April?
Mayor Donchess
The first meeting, two meetings from now. Two meetings from now.
President Wilshire
Two meetings from now. No you mean our next meeting. One meeting.
Mayor Donchess
We need it at the next meeting, | am sorry.
