Joliet Proposes Changes to Insurance Coverage
The City of Joliet’s Finance Committee will meet on Thursday, November 14th, to discuss proposed changes to a city ordinance that provides fringe benefits, including insurance coverage, for employees and retirees. The changes, put forward by Finance Director Kevin Sing, aim to reduce the city’s long-term unfunded insurance liability, which is currently estimated at $700 million. Additionally, the existing healthcare benefits are outdated and do not reflect the provisions of the Affordable Care Act (ACA) of 2010.
“A group of us has studied this insurance issue for the past six months, and after much deliberation and consultation with industry professionals, we believe these changes will help lower healthcare costs for the city while also incentivizing employees and retirees to adopt healthier lifestyles,” explained Sing.
Under the current plan, preventive care check-ups and screenings are not covered, and employees are disincentivized from seeking lower-cost healthcare options. “The current plan steers employees toward higher-cost healthcare when making medical decisions,” Sing said. “The current plan doesn’t even cover women’s health items such as mammograms, pap smears, and birth control. We are working to change that.”
The proposed new plan would cover preventive care at 100% and would offer coverage for popular weight-loss medications that are currently not covered. Additionally, a second tier of coverage would be introduced for employees hired after January 1, 2025. These new hires would be classified as Tier 2 employees, which would lead to increased savings for the city by reducing the number of retirees receiving coverage. Current employees hired before January 1, 2025, would still be eligible for retiree health insurance.
City Manager Beth Beatty supports the proposal, emphasizing that the city cannot afford to ignore the growing unfunded liability. “Many in the industry have already made these adjustments. If the city had addressed this issue 20 years ago, the city’s healthcare costs would be roughly $16 million a year, not the $32 million a year we are facing today. As insurance costs continue to rise, the city’s ability to hire and retain staff, plan for capital projects, repair roads, and provide essential services to residents will be severely impacted if funds are continually drained by healthcare expenses.”
The proposed changes would affect non-union employees, non-union retirees, and the Mayor and City Council members who have elected to take city insurance. Union employees, however, are covered by a current Collective Bargaining Agreement (CBA) that runs through 2030, and any changes to their coverage will need to be negotiated. Beatty hopes that city unions will collaborate to address the funding liability.
Sing estimates the annual savings at approximately $230,000 for the non-union workforce, but believes that by updating the current plan, the city could achieve even greater savings in the future.
