Tompkins County
New York

Report or Discussion Item

Retiree Health Insurance


Department:County AdministrationSponsors:
Category:Other Initiative or Subject


  1. Printout
  2. final briefing memo to BCP 3.13.17

Meeting History

Mar 13, 2017 4:00 PM  Budget, Capital and Personnel Committee Regular Meeting

Mr. Mareane reported on a potential health insurance option that is being explored for County retirees and reviewed points contained in his explanatory memo to the Committee:

Background: The County offers post-retirement health insurance (through our Inter-municipal Consortium) to all County employees who have retired from the County and are drawing a NYS pension. Currently, 292 retirees or their survivors participate in the plan. Retirees pay half of the cost of an individual premium and, if they choose a family plan, pay the full cost of the additional premium amount for family coverage. Although there are examples of local governments in New York State that do not offer post-retirement health benefits at all, our cost-sharing arrangement is believed to be among the most balanced of those who do. This is an important source of fiscal stability for the County and results in a substantially lower accrued long-term liability than many other governments of our size.

However, because the cost of health insurance has risen faster than pensions, the cost of purchasing County health insurance consumes an increasingly large portion of a retiree’s pension. The cost to purchase family coverage for two retirees under 65 now exceeds $1,000 per month. An employee earning $45,000 who retires at half pay receives a monthly pension $1,875 per month. The cost of insurance is not only putting a burden on existing retirees, it is a deterrent to retirement and therefore slows the natural rate of workforce attrition and the opportunities for other employees to advance their careers. The lack of opportunities to move up the career ladder was often cited by employees as a negative element of the workplace environment in the 2015 Climate Survey.

The Goal: In considering the current situation, our goal is to find a way to 1) maintain the restrained level of County contributions in order to preserve the County’s fiscal health and reasonable property taxes, and 2) lower the retiree’s cost of health insurance.

The Opportunity--Platinum Plan: Since 2015, all new County employees (other than Correction Officers) have been enrolled in the Standard Platinum Plan offered through the Inter-municipal Consortium. The plan offers coverage identical to other County plans, but in some cases requires higher deductibles and co-pays that may vary from year-to-year in order to preserve the 90-10 split of total costs between employer and employee-which is the basis of the Platinum Plan. The total (County + employee) premium for the Platinum plan is $267-$332 per month less than other County plans, including those offered to retirees.

The Concept: The County could accomplish its goals of providing a substantial reduction in health insurance costs to retirees without spending more money than it does today by:

1. Offering retirees coverage through the Platinum Plan;

2. Keeping the County’s contribution to the cost of a retiree’s coverage at the same dollar amount as it would be under the current Classic Blue Plan, which would result in passing the entire savings of the Platinum Plan to the retiree;

3. Continuing to offset the retiree’s Medicare insurance premium.

For example, the total premium for Classic Blue coverage, which is the most common retiree health plan, is $845/month. For a single retiree under 65, both the County and the retiree pay about $422 per month. If that retiree chose to enroll in the Platinum Plan, the total premium would drop by $268 per month, to $577. If the County maintained its $422 monthly contribution, the retiree’s cost would drop by $268 per month, from $422 to $154, a 64% savings.

Fiscal Impact: There should not be an appreciable fiscal impact to the County associated with adding this option to the plans available to retirees. It is possible that if the plan would be more attractive to retirees than the current plan, more retirees may opt to purchase their insurance through the County rather than their partner’s plan or, after age 65, through Medicare. This would add costs to the County budget.

Mr. Morey arrived at this time.

He said he believes existing retirees could join during open enrollment for next year and anyone retiring this year could choose the Platinum Plan once it becomes an option.

Mr. Dennis said the savings is $2,700 by choosing to go into the Plan that could be used toward the deductibles. Mr. Sigler asked if there is a representative for the retiree group. Mr. Mareane said he will be speaking to Louise McEwen who is not an official representative but who has spoken on behalf of retiree health matters for a long time. He has also spoke to a couple of individuals who have a keen knowledge and interest in this to see how this would be received and both said they would welcome this plan.