Wayne Co. delays decision on retiree health care hike

Charles E. Ramirez
The Detroit News

Detroit — Wayne County commissioners Thursday voted to send a proposal that would increase in how much some retirees pay for health care insurance back to committee.

The 15-member commission voted 14-0 to send the measure back to its committee of the whole for further consideration. Commissioner Martha Scott, D-Highland Park, was absent.

On Thursday morning, five Wayne County retiree organizations called the move “draconian” and urged commissioners to vote against the measure.

Also, the commission’s chambers were packed with retirees who were waiting to see the outcome of scheduled vote on the proposal.

Commissioner Jewel Ware, D-Detroit, made the motion to return the proposal to the committee.

“I asked for more information about retirees’ income, and I don’t have it yet,” she said after Thursday’s meeting. “My understanding is my colleagues also want more information. The more information we have, the better position we’ll be in to make a decision.”

Commissioner Joe Palamara, D-Grosse Ile Township, agreed.

“There’s sound syllogism on both sides of the issue,” he said after the meeting. “We want to take more time to figure out what the best decision is.”

Wayne County Executive Warren Evans said he’s hopeful commissioners will eventually approve the proposal.

“Wayne County still has more than $1.5 billion in unfunded financial obligations,” he said in a statement. “Because of the joint efforts of the county executive and the commission, that figure is about $1 billion less than it was a year ago.

“We must, however, continue to take fiscally responsible steps, even when difficult, if Wayne County is to fully return to fiscal health.”

Submitted by Evans’ office, the proposal calls for raising the contribution for a group of about 1,200 so-called “mirror” retirees an average of $1,200 a year. Wayne County has about 5,279 retirees, officials said.

The commission met as a committee of the whole on Tuesday and voted to forward it to the full board Thursday for its action. That vote was 9-4.

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 will 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.

Officials said the move is intended to help address the county’s unfunded health care liability, which amounts to about $462 million. In addition, they said, it 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. The county currently pays about $6,700 a year in health care for mirror retirees, but only $2,400 for non-mirror retirees.

They also said only the retiree contribution will change, the health care coverage won’t.

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.


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