Children of city retirees will ring in the New Year without city-sponsored health insurance.
As of Jan. 1, retirees children ages 19-26 will no longer be on the city’s health insurance, Executive Director of Finance Paul Wesch said.
While plans covered by the Affordable Care Act require children be covered under their parents’ insurance until age 26, the retirees’ plan is not covered by the ACA, Wesch said. In general, ACA has made the city’s health coverage more costly, Wesch said, “therefore adult children are no longer covered.”
He said the move was recommended by an insurance consultant.
“We do what we can to keep costs down,” he said. “The number (of those affected) is relatively small, but it’s significant in terms of cost.”
Mayor Sandy Stimpson’s Chief of Staff Colby Cooper said the retirees were notified through letters and the move affects those who are easiest to insure.
It is unclear how many families would be affected by the move, but Dwayne Patrick, president of the local firefighters union, said the change affects 40 to 50 families, including the families of at least two retired firefighters. The city did not supply numbers of those affected.
The wife of a city retiree told Lagniappe on the condition of anonymity that she and her husband got a letter stating their 20-year-old daughter — currently a college student — would be dropped from the city’s insurance.
Patrick called the move wrong and said he doesn’t think it affects enough employees to account for a large enough savings.
“I don’t think it’s a significant amount of money the city is saving,” he said. “I don’t know the savings it will bring the city, but I don’t think it’ll make a difference.”
Patrick said many of those affected could purchase COBRA coverage, which can cost as much as five times more. He added that he’s not certain of any recourse the retirees have, if any.
Stimpson had originally cut Medicare-eligible retirees from the city’s healthcare plan completely in his proposed 2015 budget. Instead of covering the retirees, the administration offered them a $175 monthly subsidy for four years to pay for a supplemental plan. In addition, the proposed budget raised the monthly premiums for retirees not eligible for Medicare. The premiums were set to increase from $54 to $103 for single coverage and from $140 to $210 for family coverage.
Retirees expressed their displeasure with this proposal and even started a Facebook page to help gain support for their cause.
During budget negotiations in September, the Mobile City Council voted to take money from the capital budget to fund insurance for retirees for another year. Stimpson vetoed the move, but the veto was overridden.