Merolla, Ladouceur: City Health Benefits Too Rich

Ordinance would put Warwick employee health benefit plans in line with state

WARWICK, RI —  Should the city of Warwick bring its employee health insurance benefits in line with the state? Councilman Ed Ladouceur and Council President Steve Merolla brought forth an ordinance Monday night looking to do just that stating its a burden taxpayers can no longer bear.

While introducing the ordinance to the board Monday night, Ladouceur said they are looking to get the city of Warwick essentially in the same place as the state. The city’s current benefit plan has low deductibles, short caps on prescription drugs and lifetime health care. “We have an extremely rich health care benefit package here. If not the richest in the state, certainly one of the richest,” he said. “And it’s at a point where this isn’t something the taxpayers can continue to bear the cost that they are bearing with this.”

The provision, if approved, would include several changes, but both Ladouceur and Merolla made it clear these changes would not affect any collective bargaining agreements currently in effect, but will be part of health insurance benefits under future agreements after the effective date of this amendment.

“This obviously isn’t going to go back in time and affect the contracts that were passed last year, but it will address what needs to be in the contracts in the future,” Merolla said.

Currently individual deductibles are $250 and $500 for a family plan. The proposal looks to increase those deductibles to $500 for an individual and $1,000 for families.

The city right now does not have a coinsurance provision in its health care plan. The change here would implement a coinsurance minimum of 90% with an out-of-pocket $2,000 maximum for individuals and $4,000 for families. Those would be capped once maximums are reached.

Pharmacy copays are also another expensive portion of the plan according to Ladouceur. Current pharmacy copays cap out at $300 for an individual plan and $600 for a family plan. “That’s just unbelievable keeping in mind that the prescription drug plan in our health care is a huge ,huge portion of our health care expenses,” Ladouceur said. “A cap of $300 for a single and $600 for a family is just not affordable for the taxpayers, it’s simply not affordable.” A change would increase copays to 20%, capping out at $2,000 for an individual and $4,000 for a family plan.

“These are costs that will continue to grow at a very rapid rate as health care costs continue to go up and the taxpayers can no longer bear this burden, can no longer afford this burden,” he said.

Retiree health plans would get update

Employee health care after retirement is another big expense for the city. Ladouceur said he believes last year the city crossed the threshold of having more retirees than active employees. “The free lifetime health care [benefit] is simply not sustainable,” he said. “It is simply not affordable to the taxpayers. This is something that’s just going to become more and more expensive as time goes on.”

Under the proposed ordinance, retired employees will pay a minimum co-share of the cost of the plan offered by the city based on salary and eligibility. The retired employee co-shares would be phased in over a five-year period. Employees hired after the ordinance is passed will no longer be eligible for the city’s medical insurance program upon retirement.

Matching Warwick with state health benefits would save millions

In November 2019, the city’s health care advisor told city councilors making benefit changes that align with the state’s plan would have a projected cost savings of $5 million.

Merolla told the council the reason they worked so hard on these ordinance amendments is because they’ve been hearing testimony about health care costs including when the city’s actuaries came before the council last September. “At that time they again said this model is not sustainable to the city meaning it will fail. The question is when,” he said.

Councilman Anthony Sinapi called for a fiscal note during the ordinance discussion which would have the finance department look into the current financial picture and the financial impact of these proposed changes.

No vote was taken on the ordinance proposal Monday night while the council waits to hear back from the finance department. The matter will be taken up again at the council’s Nov. 4 meeting.