Retirees cut out of city’s new health insurance plan

Change in coverage expected to save city $40,000

The city expects to save some money next year by moving to a new insurance plan, but former Shawano employees who expected their coverage to continue will be cut off by 2019.

The city had been part of the state-run Employee Trust Fund, but backed out of it because of a looming $175,000 increase in premium costs.

After some shopping around, the city decided to go with McClone Insurance, a partner of the League of Wisconsin Municipalities, saving about $40,000 in premiums.

While that’s a savings to the city, it’s a blow to former employees who retired with expectations their insurance would continue to be covered by the city plan.

That was true when the city was part of the state plan, but not as part of the League of Wisconsin Municipalities.

Under the state plan, retirees were included in a separate pool, so their health insurance claims didn’t impact the city’s overall costs.

Under the new plan, their claims would be counted along with existing employees, potentially pushing up premium costs in the future, according to city officials.

“That’s concerning because their claims could be quite expensive, considering their age,” said Shawano Common Council member Rhonda Strebel.

“Most people don’t get to hitch-hike onto someone’s plan,” she said. “I don’t think we can continue to carry those folks.”

There are eight retired city employees that are part of the existing plan. They will be able to stay on the new city plan until the end of next year, after which they will have to find coverage of their own.

“If we have to start shopping for insurance again, there’s not a lot of providers that are even going to look at us because we have retirees in our plan,” said City Clerk/Treasurer Karla Duchac.

The council voted unanimously to go with the new plan at a meeting Wednesday, even as they expressed sympathy for former employees.

“When employees retired, the commitment that the city had given them was that they would have insurance on the state plan,” said council member Bob Kurkiewicz. “I’m very concerned for those people. They were loyal employees and now they will be left with in some cases just catastrophic bills.”

Council member Lisa Hoffman said the benefits offered by the city have attracted good employees.

“Some of our employees are underpaid and the only reason they stay is that they have good benefits,” she said.

The new plan will decrease some coverage and increase out-of-pocket expenses for employees.

A trip to the emergency room will cost employees $200 rather than $60.

The plan also carries a $500 deductible for single persons, an increase from $250, and a $1,000 deductible for family coverage versus $500.