Tube City Almanac

November 09, 2009

Health Insurance Move Could Save $320K

Category: News || By

Shifting all city employees to the same health insurance plan could save taxpayers up to $320,000.

At its meeting on Wednesday, council authorized City Administrator Dennis Pittman to ask Teamsters Local Union 205 if its bargaining units are willing to move into the same plan used by police and firefighters, beginning Jan. 1.

The suggestion was approved by a 4-0 vote, with councilors Michael Cherepko, Loretta Diggs and Paul Shelly Jr. absent.

White Oak-based Local 205 represents the city's 70 public works and clerical employees.

For several years, unionized employees have been in four separate health insurance plans which renew on different dates, Pittman says. When that change was made, he says, officials believed it would encourage competition amidst health insurance providers.

But the expected savings haven't materialized, Pittman says. In fact, the city's main health insurance carrier, Highmark, has told McKeesport it could offer rates up to 14 percent lower if it had a larger "risk pool," or number of participants in the same plan.

"The size of the group is critical --- the larger the group you insure, the more affordable the insurance becomes to pay for," Pittman says. It's also made it more difficult for the city to create a budget, he says.

Any Local 205 members whose coverage changed would be reimbursed by the city, he says. "It would not cost the employees a penny," Pittman says.

The move comes as the city negotiates new labor agreements with its other unions, Fraternal Order of Police Lodge 91 and International Association of Firefighters Local 10. Their contracts expire Dec. 31.

There have also been discussions with both Highmark and UPMC Health Plan of creating a "self-insurance" policy for everything except catastrophic injuries or illness, Pittman says.

Councilman Darryl Segina says city officials investigated self-insurance in the early 1990s, but decided it was too expensive and complicated. Since then, Segina says, premiums have gotten so much more expensive, it may be worth reconsidering.

. . .

Sewage Liens, Due Bills Sold: In other business, council by 4-0 vote approved the sale of delinquent sewage accounts to the Municipal Authority of the City of McKeesport for $600,000.

City officials estimate they are owed about $900,000 in past-due bills and liens for sewerage service from 2008 and earlier. The city no longer collects sewerage fees, having turned the lines over to the municipal authority, which operates the sewage treatment plant in 10th Ward.

. . .

Approve Tree, Computer Contracts: Council by 4-0 votes hired Davey Tree Expert Co. to conduct an inventory of all of the trees in Renziehausen Park, and appointed East McKeesport-based DataMatrix Solutions as the city's computer consultants.

The Davey contract, valued at $6,100, is required because the park receives a subsidy from the Allegheny County regional asset district tax, officials said. The Kent, Ohio-based company will map the location of the trees in the 258-acre park and suggest which ones should be pruned or replaced.

The 14-month Datamatrix contract, valued at $2,428, will provide for emergency service to fix desktop computers and servers, along with periodic maintenance and upgrades.

The city is in the process of replacing several obsolete computer systems which aren't networked and can't work together, Pittman says. "We're antiquated by today's standards," he says. "It will make a tremendous difference in our efficiency."

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