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Utilities employees could be asked to foot more health costs

September 3, 2010

Employees of Colorado Springs Utilities could wind up paying more of their health care costs next year.

Mayor Lionel Rivera wants the municipally owned utility to bring its premiums in line with private-sector plans in which  employers typically pick of 80 percent of health care costs and employees 20 percent.

That  increase would reflect what Utilities’ ratepayers are paying for their own health insurance, Rivera said in an interview last week. “To me, that’s fair.”

The question of health care premiums was first raised at an Aug. 18 Utilities board meeting. The  board, which consists of the City Council members, requested more information and will revisit the topic at its Sept. 22 meeting.

Rivera said he believes the majority of the board members will support a premium increase. “It’s only fair to ask Utilities to have a more balanced policy. Whatever Utilities pays for its employees is reflected in rates.”

The discussion about raising the employee premiums is similar to one that took place in early August at City Hall. The city pays 92 percent of its employee premiums and employees pay 8 percent. The city’s Human Resources Department has recommended that employees’ share be increased to 20 percent, a change would save taxpayers roughly $2 million.

Currently, Utilities pays 90 percent of the premiums and employees pay 10 percent. Utilities has not yet calculated how much ratepayers would save if employees picked up a larger share of their premiums, said Utility spokesperson Natilia Sibert.  She said Utilities’ benefits consultant is preparing an analysis that will be presented to the board in September.

However, Rivera said the number would probably be close to the $2 million the city would save.

Another city-owned enterprise, Memorial Health System, has two health plans, said Cari Davis, director of communication and marketing. Depending on the plan, the employee’s share of the premium is either 10 percent or 20 percent.

Councilman Tom Gallagher said the city would have more economic clout if all the healthcare plans were combined. He said the city currently pays a total of about $75 million in healthcare costs for about 19,000 employees and their dependents. “We own a healthcare system, and there’s got to be a way to leverage that,” he said in an interview.

Vice Mayor Larry Small disagreed, saying the city, Utilities and the hospital system have different kinds of employees, and their respective healthcare plans are competitive when compared with other similarly situated industries. “If you look at Utilities and the city, the two plans are completely different. Utilities has higher co-payments and deductibles,” he said.

Councilman Sean Paige said the inquiry into premiums wasn’t a “jihad” against public employees. “Everybody’s struggling,” he said. “Everybody’s being squeezed in both the public and private sectors.”

Sandi Yukman, Utilities' general manager for human resources, told board members that during the past five years Utilities has asked its employees to pay more for their healthcare benefits. When deductibles and co-payments are factored in, Utilities employees in 2011 will effectively pay 29 percent of their healthcare costs and the organization 71 percent.

The utility’s health care costs are below the national norms, she added. “What we’re doing with health care is very deliberate, very planned and very strategic.”

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