City of Macon's retiree health benefits under microscope

Macon City Council members are moving toward changing retiree health benefits in a money-saving maneuver, but what those changes will look like remains to be seen.

A key council committee adjourned Wednesday without taking action on several proposals, with members saying they need more information and more time to make a good decision.

With Tuesday evening’s approval of a new city budget — one that already includes higher insurance premium payouts for retirees and current employees — council members have said they have some time to consider larger changes.

The earliest a decision is likely to come is next month, when the council’s Employee Development and Compensation Committee meets again. But it’s not clear how much consensus there is on the council to balance city budgets by changing health benefits.

Top administration officials say significant changes will be needed to get the city back on a path to overall financial health. Health insurance costs are taking too big a chunk of the city budget, they said, and changing the way retirees are treated is one way to rein that in. It’s also a way to avoid employee furloughs, which some members see as a more distasteful option.

There also is talk of downsizing the city’s work force, and city Chief Administrative Office Thomas Thomas is working on a recommendation there.

“We’ve got to make some major changes in the way we operate, whether it’s health insurance, whether it’s layoffs ... it is a balancing act,” Committee Chairwoman Lauren Benedict said Wednesday.

Until recent years, city employees didn’t pay any monthly premiums for health insurance. Now premiums are in place and will jump Aug. 1 to about $113 per month for each employee and retiree.

That change saves the city, which is self-insured, money by shifting costs to employees and retirees. Now several proposals have emerged to save the city more: withdrawing health insurance coverage for future retirees, charging them more for retirement health insurance and changing the city’s policy for new hires, so they know going in that they won’t have city health insurance after they retire.

None of those proposals would affect current retirees but only future ones, council members said. Some of the changes might lead longtime employees to retire soon to keep their benefits, which also would save the city money on salaries.

The proposal to increase the monthly cost of retiree insurance — but still allow retirees to buy into the system — received the most discussion at Wednesday’s meeting. That could end up costing retirees as much as $550 a month, a large chunk for some of the city’s lower-paid former employees, some council members noted. But with Medicare serving as the primary insurance provider for any retiree age 65 or older, other members argued that monthly cost could be mitigated substantially for those who want to keep secondary coverage from the city.

At a more fundamental level, there seems to be a split among council members prepared to significantly change what it spends on employees and retirees, whether through job cuts or benefit changes or both, and those who are not. “I don’t know why y’all just feel like you’re doomed,” Councilman Charles Jones said, noting that city officials have been complaining about the city’s financial health for years, but it’s always survived.

“I don’t see the wolf coming, and I don’t believe, Chicken Little, the sky’s falling,” he said.

Said Councilman Mike Cranford, the council’s Appropriations Committee chairman: “We have put so many Band-Aids on this budget, the city is walking around looking like a mummy. ... And next year is going to be worse than this.”

Benedict said she thinks there are enough votes to overhaul retirement health benefits but noted she doesn’t have “a crystal ball.”

To contact writer Travis Fain, call 744-4213.