Detroit health plan to drop some retirees

Christine Ferretti
The Detroit News

Detroit – Police Sgt. Nancy Headapohl and her husband, Dave, have dedicated a combined 73 years of service to the city.

A former lieutenant, Dave Headapohl served 40 years prior to his retirement in 2006. He was exempt from Medicare and Social Security and got dropped from the city's traditional health insurance plan under changes imposed last March.

Since then, he's been covered under his wife's policy. But that coverage ends under terms negotiated in the city's landmark bankruptcy, leaving him "completely on his own," his wife says.

"How can human beings that have given so much be cast aside?" said Nancy Headapohl, who at 59 is eligible herself for retirement in November, but says her pension won't cover the costs of a comparable plan.

Headapohl is among roughly 300 general and uniform employees impacted by the health care plan change that will kick in on Feb. 1. It has prompted the City Council president to seek legal opinions and at least one public safety union to vow a court appeal.

Mark Young, president of the Detroit Police Lieutenants & Sergeants Association, says some active members received notification earlier this month that their spouses, who retired from the city and had been covered on the family or two-person plan, will no longer be carried.

"This is discrimination at the highest level," argues Young, who says he's pursuing "all legal remedies." "No individual should be punished because they are married to or they are a city of Detroit employee."

Detroit's former Emergency Manager Kevyn Orr implemented the changes in 2014 and continued them in 2015, noted Alexis Wiley, Mayor Mike Duggan's chief of staff.

Wiley added the spouse benefit change was included in collective bargaining with all city unions and is reflected in employee benefits booklets for 2014 and 2015.

"The City is required to comply with the 2016 budget that the Emergency Manager adopted and the Plan of Adjustment projections," Wiley said in a written statement to The News. "Therefore, at this time there is little the administration can do ... to change health care benefits for retired spouses of active workers."

Detroit's Human Resources Director Michael Hall echoed Wiley's position when he addressed some council members, retirees and active workers during a council subcommittee meeting this week.

On March 1, 2014, the city dropped its traditional health insurance plan for retirees not eligible for Medicare. Instead, retirees and survivors were given monthly stipend checks of $125 or $175, depending on income level.

As of Jan. 1, retiree health care is being offered through the city's newly created independent health care trusts — known as Voluntary Employee Benefits Association (VEBA) — to provide health care benefits for retirees.

Under the plan, the two health trusts will split $450 million in city funds to provide health insurance benefits for retirees, significantly lowering the city's $4.3 billion long-term liability for health care and other post-employment benefits. One trust is for general retirees, another is dedicated to retired police officers and firefighters.

Young said the changes were discussed during the bankruptcy process, but contested "adamantly."

Retired Detroit Police Cmdr. Frank E. Lewis and his wife, Sgt. Cassandra Lewis, who is still employed by the department, are also impacted by the change they say is "a slap in the face."

"After everything we've given to this city ... they keep on taking and it's just not fair," said Frank Lewis, who retired in October 2013.

Council President Brenda Jones expressed concern over the plan change and asked that it be evaluated by the city's law department and council's legal team.

"Let's work together to see what we can do to find a solution to stop the problem that none of us (council members) are responsible for," she said.