10-18-04 Special Called Workshop Meeting of La Porte City Council

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~. ~.~~L®~.~ l ~ Y 1R~~ i~'1~~~~riL il\ S~tit\ ~1'~ ~Y FACTS° 1) The City has contributed $ 5,000.00 for each employee and retiree each year 2) Employees nor retirees have contributed anything in the past (spouses /family excepted) 3) The fund hss been subsidized for ~ $1,250.000.00 in past years. 4) There are no funds available to transfer in this year. 5) If we do not get contributions from plan beneficiaries the plan fund balance will be completely gone and if we have an eatraordinariiy high claims year the plan will not be solvent. ~ To save the plan and to be able to continue to provide access to good health care for employees and retirees in the future it is imperative that we take some immediate, positive action to reduce the demand on the plan and to incorporate a contribution pla® that is fair and adequate to not draw down the faand balance. 7) We must also be prepared to move the contribution levels up another level neat year unless we are very successful in containing.claims costs and are able to build the fund balance backup. 8) It has been suggested that employees /retirees were "guaranteed" that they world not have to pay for insurance. There is nothing to suggest that a promise was made. It would be an ideal situation if ~e could provide the insurance at no cost to anyone but the reality is we have some very real fiscal constraints. 9) It has been suggested that it is not fain" to charge the retirees on f aed incomes. The a c -' s (undea~ 6~) is te~+ice (2' des) that of the regular employees. To me it seems unfair to put the entire cost load on the worldng employee that is not on a fixed income but may be trying to raise a family on $10.00 to $12.00 /hour with the cost of living increasing rapidly ini some areas (i.e. gasoline @ $ 2.00 /gallon). 10) We need to try and find a reasonable, fairly distrsbuted rate that will save the plan and .allow ns to continue to provide access to a good, reasonably priced insurance plan. 11) The current proposal-has four plans available and the "premium" plan ($300.00 / PPO) is what is currently available so we have provided a top of the line plan at no cost for a long time, The reality is that if we had been cost sharing before now we might never have reached this point. 12) The City of La Porte is contributing ~ $ 2,100.000.00 to this plan. This equates to about 14.29 cents of our 71 cent Tag fl2ate (~ 20.13 % ).