County health insurance costs rise
By JIM ANDERSON
IRON MOUNTAIN – Dickinson County will dip into its Retiree Medical Care Reserve Fund to help meet rising health insurance costs in 2014.
The county board agreed Monday to allow a drawdown of nearly $109,000 from the fund, which has a current balance of $2.47 million.
The fund was created in 1998 to help pay previously negotiated health care benefits for county retirees. Employees hired after Jan. 1, 1996, are not eligible for such benefits upon retirement.
The county’s share for all health insurance costs in 2014 is projected at nearly $1.95 million, including $665,000 for retirees. That total is up by more than $300,000 from an estimated $1.64 million in 2013, an increase of 19 percent.
Initially, Controller Nicole Frost hoped to slice about $180,000 from the county’s obligation by switching coverage to C.O.P.S. Health Trust. That carrier’s quote, however, proved to be unacceptable under contract obligations.
To keep the current Blue Cross Blue Shield coverage, the county lowered its Health Reserve Account allocation from 40 percent utilization to 30 percent, which matches historical trends and results in a savings of about $60,000. If employee utilization is actually higher, though, the county could see those savings diminished.
To cover the remaining insurance shortfall, the county will transfer $10,000 from a reduction in workers compensation rates. Mainly, though, it will tap – for the first time – the retiree reserve fund.
“The county hasn’t put anything into (the fund) in quite some time,” Frost noted.
The drawdown is less than the fund’s earnings in recent years, she added. The fund shows earnings of $262,000 in 2012 and $184,000 year-to-date in 2013.
Under previously negotiated contracts with the county’s collective bargaining units, employees will see wage increases of about 2 percent in 2014 but will see their share of health insurance costs rise to 20 percent, up from the current 15 percent. The employee share for health insurance in 2014 is projected at $292,000, compared to an estimated $181,000 this year.
With labor contracts expiring at the end of 2014, County Board Chairman Henry Wender named Commissioner John Degenaer Jr. to head an insurance committee to investigate the county’s future options, as well as a negotiating committee to handle talks with the county’s bargaining units. Commissioner Barbara Kramer will also serve on both committees.
It was noted at Monday’s meeting that non-union administrative workers hired before 1996, as well as eligible elected officials who took office before then, are entitled under a county resolution to retiree health benefits.
According to Frost, those employees are bound to the benefits they are receiving at the time of retirement. Thus, an employee retiring in 2014 would be obligated to pay a 20 percent share of his or her premiums.
Blue Cross Blue Shield indicated that more than $100,000 of the 2014 insurance increase is due to additional state and federal taxes linked to the Patient Protection & Affordable Care Act, Frost has reported to the board.
A public hearing on the county’s 2014 budget is scheduled for 6:30 p.m. Monday, Dec. 9. The proposed budget maintains the county’s current general fund balance of about $1.5 million, or 17 percent of total spending.
In other action Monday, the county board:
– Heard Frost report that year-to-date passenger boardings at Ford Airport through October total 7,585. That’s slightly below the pace needed to reach the 10,000-passenger threshold that makes the airport eligible for $1 million in infrastructure funding through the Federal Aviation Administration. The airport last met the threshold in 2011 – the first time it had qualified since 1995. “If you have anywhere to go, use Ford Airport, please,” Frost remarked.
– Was informed by Equalization Director Sid Bray that a new state law extends property tax exemptions to a larger group of veterans with disabilities. The exemption will be available to veterans who are designated 100 percent disabled by the VA, as well as veterans who are designated unemployable by the VA as a result of the disability. An affidavit will be required annually, Bray noted. Eligible disabled veterans will be able to apply for a 2013 exemption at the December 2013 Board of Review, according to Gov. Rick Snyder’s office.
– Approved a 2014 borrowing resolution to allow County Treasurer Lorna Carey to purchase 2013 delinquent taxes. In recent years, the county has engaged in this practice to make all local taxing units (schools, townships, etc.) whole. The loan is then repaid as the overdue taxes are collected. In 2013, the county borrowed $1.75 million from First National Bank of Iron Mountain-Kingsford for this cash flow purpose. The amount of interest paid on the loan through Nov. 1 was $3,734.
– Authorized a contract with Larry Wall of Stephenson-based Housing Rehab of Upper Michigan for administration of a Dickinson County housing rehabilitation grant awarded through the Michigan State Housing Development Authority (MSHDA). The grant amount is $175,000 for projects to be performed over the next two years. Wall will be paid by grant funds under MSHDA guidelines, receiving up to $34,370 for administrative and field work services.
– Approved a revised proposal from Charter Communications to provide wireless internet and telephone services at Lake Antoine Park. The new monthly fee is $132.14, an increase of $19.59 from the previous quote, due to the presence of a second line for credit card processing and faxes, Frost explained. The county will be able to suspend certain charges for the winter months.
– Approved a request from Jeff Moore to hold an informal “Turkey Trot” run at the Fumee Lake Natural Area on Thanksgiving Day, subject to an indemnification agreement.
Jim Anderson’s email address is firstname.lastname@example.org.