With millions of dollars in balloon payments on the horizon, Spotsylvania County officials are looking into changing the retirement health care plan for employees.
The issue has come up at Board of Supervisors meetings in recent months, and each time a crowd of retired county employees has packed the meeting room. Most of them are against making any changes to the health care plan.
Three well-known retired county employees spoke at this week’s supervisors meeting. Four other retirees and one employee also spoke at the meeting. All of them spoke against the proposed change.
“I don’t like it,” said Emmett Marshall, a former county supervisor.
Mary Lee Carter, also a former supervisor and now a planning commissioner, said what others opposed to the proposal have highlighted.
“Many of the people behind me have worked hard,” she said in front of the crowd of about 150 people, many of them county retirees and employees. “They deserve what they were told they’d get.”
Former Spotsylvania Sheriff T.C. Waddy also spoke, saying the supervisors need to respect county employees.
The proposed health insurance change would impact only retirees who reach age 65, when they become eligible for Medicare.
Under the proposal, the county would not pay for those retirees’ supplemental insurance plan, but instead would give them $625 a month to pay for insurance.
The issue gained steam earlier this year as the supervisors were dealing with the potential of having to set aside $9 million annually to pay for an increasing pool of retirees and more expensive insurance plans.
The current insurance plan was instituted in 1988, Mary Sorrell, the county’s director of finance, told supervisors at the June 28 board meeting. The county was supposed to be putting money into an account to cover future health insurance plans for retirees. That wasn’t done.
“The liability is huge,” Mary told the supervisors at the June meeting.
Supervisors began setting aside funding for the insurance costs in 2015. The board voted to include $1.2 million in the fiscal 2019 budget, which would bring the total set aside to $4.5 million.
Lee Deskins, a consultant hired by the county’s insurance provider to handle the proposed change, said at Tuesday’s meeting that the plan is good and most retirees would benefit from the change. He said of 43 retirees he interviewed, all but two would have money left over under the new plan, some as much as $3,500 annually.
“We believe for the large majority ... this will be an improvement,” said Deskins, who told the supervisors at the June 28 meeting that four other Virginia localities have made similar changes to retiree health insurance coverage, including Henrico County.
At the June 28 meeting, Deskins said the issue at hand seems to be that the retirees are resistant to any change, whether it’s good for them or not. He said he helped his parents, both in their late 80s, deal with a similar change and that he understands the reluctance of many to the proposal.
Supervisors have said they also understand that stance against the change, while also bringing up other concerns.
Salem District Supervisor Paul Trampe said at the June 28 meeting that he is open to many of the options, “but not to kicking the can down the road” like previous boards by making “unfunded promises.”
Lee Hill Supervisor Gary Skinner said he thinks the plan is a good one, but he is concerned about the unknowns such as health issues that could increase costs for some retirees.
“I think we’re taking a risk,” he said at this week’s meeting.
He also thinks the county should honor what it promised to employees who expected to have health coverage in retirement. The other supervisors seemed to concur with Skinner on that point.
The supervisors all wanted to look at giving retirees and employees a choice, such as grandfathering them so they could keep the current plan if they want to.
Deskins raised one issue with giving retirees a choice. He said that if the retirees don’t lose the plan involuntarily, they would have to face questions about pre-existing medical issues from insurance companies.
If the county allowed all current employees and retirees to keep the plan, the county would still be on the hook for nearly all of the $9 million annual payments, according to Sorrell.
If only current retirees are grandfathered, the annual cost would drop by an estimated $3.4 million, she said. If no one is grandfathered, the cost would drop by about $3.9 million.
Sorrell said the proposed plan would result in “substantial savings” for the county. But she also is concerned about whether future boards would honor it.
The county is looking to make a decision on the proposal by October.