Waterford Twp. retirees face insurance change

çWaterford Township may soon modify its retiree health care program for those 65-years-old and older to save the township over $350,000 in the first year after implementing changes.

“My challenge is taking positive steps to balance services; it will create a sustainable plan, and avoid a fiscal crisis and total collapse of our health care plan,” said township Treasurer Margaret Birch.

Currently some retirees in this age group pay a $2 co-pay on prescriptions. This would be upped to $5.

“By changing the co-pay to $5 per prescription it will allow us to get a better plan, Medicare Advantage,” Birch said. “So everyone understands, we are self-funded, meaning any amount of dollars over the $5 co-pay would be paid by the township.”

Therefore, the Blue Cross Blue Shield Traditional program would discontinue and Blue Cross Medicare Advantage would be implemented. The new program would take effect Feb. 1, 2013.

“Traditional Blue Cross is very costly and is no longer available to current employees,” Birch said. “Under the new plan, many preventatives such as doctor visits are paid in full.

“Other communities are getting away from traditional Blue Cross and many of the surrounding communities do not pay health care for retirees past age 65, but Waterford does,” she said.

One benefit to switching over to Medicare Advantage is that the township will have its own representative on hand to answer questions via telephone.

The township, like other municipalities, is mandated to identify and accrue the actuarial liability for retiree health care, which is pegged at $157,696,179, according to Birch.

“It’s a huge liability, but we are not alone. Many municipalities are in the same boat,” Birch said. “Our savings will continue to increase as we implement the plan.”

Currently the township pays over $9.3 million in health care costs cumulatively for active employees and retirees.

“Health care costs have risen 32 percent in the last four years alone,” Birch said. “To confront this the township instituted the most fiscally conservative option under Public Act 152 of 2011.”

“If the plan costs $24,000, we pay $15,000 and the employee must assume the difference, so the township is saving $1.2 million by going with the hard cap. This was one option as mandated by the government so employees pay some costs,” Birch said.

This “hard cap” is limited to paying $15,000 per family per year; $11,000 for two person households; and $5,500 per individual.

New employees must contribute to purchase health care after their employment.

Birch will be presenting this information to the township Board of Trustees as part of a budget presentation on Monday, Dec. 17.