Healthcare reform has come to Tooele City Hall, affecting three city employees who receive long-term disability benefits.
Public Employees Health Plan, which provides health insurance to public employees, recently notified City Hall it planned to change the way it funded the insurance for city employees receiving LTD benefits, Human Resources Director Kami Perkins told the Tooele City Council last week.
Brian Holland, PEHP communications manager, explained that currently, city employees on LTD receive a PEHP insurance plan partially funded by the city.
However, recent federal legislation caused PEHP to rethink the way it provided insurance to employees on LTD, he added.
“This insurance has included coverage for LTD recipients because no other reasonable option for medical insurance had existed,” Holland said. “The Affordable Care Act changed this by creating the marketplace, which enables individuals, including those who are disabled, to obtain medical insurance without regard to pre-existing conditions. In addition, individuals who obtain medical insurance through the marketplace may qualify for federal subsidies to make their insurance costs lower.”
According to Holland, PEHP offered four options to the city going forward: The first option was to cease offering a medical plan as one of the LTD benefits.
The second option was to cease offering the LTD medical benefit and instead offer a stipend equal to the medical premium the city currently pays plus 10 percent, which employees on LTD could use to pay a third-party insurance company.
The third option was to continue to offer the LTD medical benefit with the understanding that the risks and costs to Tooele’s group health insurance plan would increase.
The fourth option “was to end the LTD medical benefit going forward for any new LTD applicants but grandfather those already on LTD with the stipend model,” Holland said.
The change would be effective Jan. 1, 2016.
Perkins told the city council during an Oct. 7 meeting that she discussed the options with Mayor Patrick Dunlavy and it became apparent none of them were acceptable.
“I put myself in their shoes, receiving a letter saying, ‘You lose your healthcare in two months,’” Perkins said. “I just don’t think that’s enough time.”
“Our concern [with the stipend model was] the long-term commitment of the city,” Dunlavy added during the meeting. “Obligating the city for an unlimited stretch of time isn’t good. That’s why we proposed a compromise. With this, we wouldn’t need extra funding.”
With PEHP’s approval, Perkins and Dunlavy drafted a fifth option — a hybrid of the first and third options. The city council unanimously approved the policy change in Resolution 2015-46.
The adopted resolution will allow the three employees currently on LTD to remain on the city health insurance through Dec. 31, 2016, after which those employees will need to secure their own health insurance. New LTD applicants after Jan. 1 may apply for temporary coverage on Tooele’s group health insurance plan under the Consolidated Omnibus Budget Reconciliation Act, or go directly to the marketplace to secure third-party medical coverage, according to the resolution document.
More information about COBRA is available at www.cobrainsurance.com.
Perkins wished to reserve all further comments about the policy change until after she could notify the affected employees.
PEHP is a nonprofit organization that manages a trust fund funded by the city. In Tooele’s group health insurance plan, PEHP uses money from the trust fund to pay employee medical claims. It returns any unused funds to the city at the end of the year, according to its website.
