Insurance costs are reaching a point that the city of Pacific may no longer be able to afford the level of coverage now provided to employees and their families, said City Administrator Steve Roth.
Speaking at the Oct 2 board of aldermen meeting, Roth said the city is facing a massive increase in employee health insurance.
“We will not be able to sustain these costs,” he said.
The only way to sustain the level of coverage would be for employees to absorb some of the cost, Roth told aldermen.
“It’s very disappointing,” he said. “I feel helpless.”
Employee health insurance is provided by MIRMA. Under the current coverage, the city pays the premium for the employee and splits the cost of dependents’ premiums with workers.
The city also reimburses employees for the deductible cost.
Roth said the city’s claims experience is average, which makes the 15 percent increase more difficult to face.
The city has good coverage, he said, which is appreciated by the employees, but not sustainable in the long-term.
“There is no way to reduce costs without transferring some costs to employees,” Roth said. “At some point, we will have to make some very tough decisions.”
Alderman Andy Nemeth said it’s not out of the ordinary for employees to have to pay for part of their health insurance coverage.
“As employees, we had to suck up some of the cost,” he said. “Health care comes down to money.”
Nemeth said he personally pays $420 every paycheck for health insurance.
Roth said he has asked MIRMA for options for the same plan or an alternate plan and hopes to bring those back to aldermen at the next board meeting.