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City officials are considering whether to become the lead plaintiffs in a class-action lawsuit against the region's largest provider of health insurance.

At last night's council meeting, Mayor Jim Brewster said he also was lobbying state and federal elected officials to investigate whether Highmark Blue Cross Blue Shield was guilty of building a surplus far in excess of what non-profit corporations are typically allowed to hold.

"I want to challenge their non-profit status," he said. "I think these gentlemen should be paying taxes to the communities they represent."

The moves come as the city is struggling to cope with a nearly 84 percent increase in health insurance premiums for 80 city hall, public works and administrative employees covered under a collective bargaining agreement with Teamsters Local 205 in White Oak.

The rate hike, first reported in May by the Daily News and the Almanac, would cost the city an additional $620,000 each year.

McKeesport, which currently spends about $2.2 million each year on health insurance for 160 employees, was not the only community whose premiums increased by double-digit percentages. According to a story last week in the Post-Gazette, Highmark increased Brentwood Borough's premiums by 70 percent, or $262,000, and Glassport's by 65 percent.

Brewster, who has adamantly been against seeking assistance for the city under the state's Act 47, warned council that if the $620,000 premium increase is allowed to stand, it could be a "segue" into distressed status.

"You do not have the money to pay this," the mayor said. "You do not have the means to get the money. This is a major problem."

Highmark, which is planning to merge with Philadelphia's Independence Blue Cross, earlier this year reported that its surplus has reached an all-time record high of $3.5 billion.

"We have a non-profit organization that pays no taxes raising your premiums by 83 percent," Brewster said. "I want to challenge their non-profit status."

If the city has too many employees seeking expensive medical treatment, he said, it is open to negotiating with Highmark. "If we have utilization issues, then we deserve to have our premiums increased," Brewster said, "but usually those increases are in the range of five to 10 percent."

As of last night, the mayor claimed, the insurance carrier has refused to speak directly with city officials, choosing instead to deal only with a broker hired by Local 205.

The city has solicited proposals from competing health insurance providers, Brewster said, "but it's real tough to compete when those organizations already know what your bids are."

The mayor was interviewed Monday about the rate increase on KDKA (1020) radio by talk-show host Marty Griffin. A Highmark spokesman interviewed later by Griffin reportedly said that the problem was the result of fees charged by Local 205's insurance broker.

Employees in Brentwood and Glassport are also represented by Local 205.

Brewster disputed Highmark's argument. "There are non-205 communities that got the same kinds of increases," he said.

City officials want to have a less-expensive health care plan in place before they negotiate five other labor agreements that will soon be expiring, Brewster said.