City workers must pay health insurance premiums

VIRGINIA BEACH

For the first time, city employees and retirees will have to pay for individual health insurance plans.

The City Council unanimously approved a slew of changes to its health insurance policies for current employees and retirees that could save the city an estimated $15 million in annual costs and future liabilities.

The changes come after more than a year of discussion about the ballooning cost of insurance and how much taxpayers should subsidize. The policy will probably have to be revised again, Councilman Harry Diezel said.

"Will it be sufficient two years from now, or four years from now?" Diezel said. "No, probably not."

Starting in January 2009, all city employees and retirees who leave with 25 years of service before they turn 65 will have to pay a $25 a month premium for individual coverage. The city had paid the entire cost. Most private employees have to contribute to their health insurance cost, said Councilman Bill DeSteph, and city workers should be no different.

Employees who retire from the city with less than 25 years of service will be eligible for a point-of-service plan, as long as they pay the full cost. They had been eligible for the city's HMO plan.

Councilman Jim Wood said he still has concerns about the plan but voted in favor of it so the council could move forward with informing employees of their options for next year.

The new policy also anticipates future changes to the city's health insurance coverage, including health savings accounts.

In other action Tuesday, the council approved a trust fund for future health care costs. The city will put money into a new trust operated by the Virginia Municipal League and the Virginia Association of Counties. Participating communities will be able to spread out the costs and take advantage of more investment options, advocates for the plan said.

Deirdre Fernandes, (757) 222-5121, deirdre.fernandes@pilotonline.com