With the rising cost of health insurance a national issue, city of Fairhope employees still get a rare benefit: Their health insurance premiums are free.
It doesn’t matter if an employee is a single person needing coverage for one or has a family. Like nearly everyone else, Fairhope employees must meet annual deductibles and co-pays. But while most employers ask their employees to pay a percentage of the premium, which is typically deducted from their paychecks, Fairhope does not.
With the cost of insurance continuing to rise, city officials are taking another look.
The administration of Mayor Karin Wilson has estimated that by 2018, premiums for individual employees will have gone up 35 percent over four years, and family premiums will have gone up by 34 percent.
This year’s estimated premiums are $581.62 per month for a single employee and $1,450.37 for family coverage, according to the numbers provided by Wilson during the budget process. Those premiums are up from $422.16 and $1,062.45, respectively, in 2015.
Taking office in November, Wilson initially suggested health insurance as one area where city expenses could be reduced. But with so much concern nationally about the future of health care and with the city budget passing only in the last couple of weeks, the city is now looking at different options to offer a choice of plans.
All the plans the city has reviewed are from Blue Cross and Blue Shield, Wilson said. “We’re still looking at all the options,” she said.
At least one of the plans would be offered at no charge, Wilson said. Another might be a premium benefit plan with some charge to employees but with more generous benefits.
Ken Smith, executive director of the Alabama League of Municipalities, said he did not know if any other city or town in the state offers free coverage. “I don’t think there’s ever been data that’s been compiled,” he said.
During budget debates, some council members expressed concern rising health insurance rates could affect city employee salary packages. The net effect could be to give an employee a $1,400 pay cut, said Councilman Kevin Boone. The council voted in a 2 percent cost-of-living raise with the new budget, Boone said. He generally doesn’t favor cutting back on health benefits right now because the city has essentially pledged to its employees that it won’t. “It’s part of their package,” he said.
Boone said he would be willing to consider having new employees pay a portion of their own premium costs.