Wayne Co. weighs increase to some retirees’ health care
Detroit — Wayne County’s commissioners on Tuesday voted to forward a proposal that would increase how much retirees pay for their health care.
Meeting as a committee of the whole, commissioners voted 9-4 to send the proposal to their full board without recommendation. Commissioners Al Haidous, D-Wayne, and Martha Scott, D-Highland Park, were absent. The full board will meet Thursday.
The proposal, submitted by the office of Wayne County Executive Warren Evans, calls for raising the contribution an average of $1,200 a year for a group of about 1,200 so-called “mirror” retirees. Wayne County has about 5,279 retirees, officials said.
Mirror retirees are county workers who retired from their jobs between 2007 and 2015 under labor contracts that guaranteed they would would get the same health insurance benefits as active county workers. The county has about 3,200 employees.
Under the proposal, the county could use its consent agreement with the state to raise how much mirror retirees pay every month toward their health care plans. Officials said the average increase would be about $100 a month.
Deputy County Executive Richard Kaufman told commissioners Tuesday the move is intended to help address the county’s unfunded health care liability, which amounts to about $462 million.
He said it also makes the system more fair to active employees, who are required to contribute 25 percent toward health care while mirror retirees only contribute 10 percent.
“We believe it’s the most fair, fiscally responsible thing to do,” Kaufman said.
He added only the retiree contribution will change, the health care coverage won’t.
Commissioners Glenn Anderson, D-Westland, Raymond Basham, D-Taylor, Burton Leland, D-Detroit, and Diane Webb, D-Livonia, voted against forwarding it to the full board.
“To continue to say we’ve done this to other people, so we should do this to these people, too, because it’s fair, to me, that’s two wrongs don’t make a right,” Webb said. “I don’t believe in letting people work all of their lives and then taking away everything they’ve worked for.”
In January 2015, Wayne County faced a $52 million annual deficit stemming from an underfunded pension system and a $100 million drop in property tax revenue since 2008. In addition, the county was pulling about $20 million from its general fund each year to bolster its pension system.
Four months later, the county ended health care coverage for future retirees as part of a recovery plan designed to slash $230 million from the county’s budget over four years.
It also transferred some retirees from an employer-paid group health care system to one that gives them a monthly stipend to pay for a plan purchased on the federal Health Insurance Marketplace. The move to a stipend, which affected about 5,000 former employees, stemmed from the settlement of a lawsuit filed by retirees.
By June, Evans asked the state to declare a financial emergency and intervene to help fix the finances of Michigan’s most populous county. In August, the county entered into a consent agreement with the state.
After a series of cost-cutting measures, the county closed its last fiscal year with a positive general fund balance for the first time in eight years.