Switch would save $70,000 a year

GUSTINE – A city looking to save money wherever it can will shave tens of thousands of dollars off its annual employee benefit cost by switching to a different insurance plan.

The City Council approved the change last week, but all three employee bargaining groups must sign off on the switch in order for it to move forward.

City Manager Margaret Silveira said the proposed Blue Shield health savings account (HSA) plan will provide better coverage for the employees while saving the city about $70,000 a year in benefit costs.

The city offers medical benefits to its full-time employees and their families, Silveira said.

Under the HSA the city will pick up the premiums and will set aside the deductible of $1,800 for an individual or $3,600 for a family for use as needed through the year. Any remaining amount will roll over to the following year and may be used at the employee’s discretion for any medical-related expenses.....from bandages to braces, according to Silveira.

“The employees do not currently have 100 percent coverage, so it is an improvement for them and the city is saving money even though it is providing the deductible amount,” the city manager noted. “It is beneficial to everybody involved.”

The change will also mean that the insurance coverage provided to Mayor Rich Ford will be phased out. Silveira said HSA plans do not allow elected officials to be covered. Ford joined the council at a time when council members were offered medical insurance. The city has since halted that practice, phasing it out as members who were covered left the council.

The city will pay the mayor’s HSA premium during an 18-month transition period, Silveira said, but will not cover the deductible.

“Rich agreed to that. He was comfortable with that,” Silveira said.

The city currently pays about $340,000 a year for employee health care benefits through Operating Engineers 3.

Silveira said the change is subject to formal approval by the city’s three employee groups. Verbal approval has been given by two of the groups, Silveira said.

In other action last week, the council:

· Extended the application period for appointment to vacancies on the Gustine Planning Commission and Gustine Airport Commission until Jan. 28.

The city had received two Planning Commission applications for two positions, and two Airport Commission applications for three vacancies.

“There were a lot of people who indicated right after the application periods closed that they would have liked to apply,” Silveira said. “This gives us a chance to get more people involved.”